Can Regulation Promote Financial Inclusion?
Despite the commitments of the development community toward broader access to finance, financial inclusion rates worldwide are rather unsatisfactory. To date, around two billion adults do not have access to basic financial services such as savings...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/689111547822970149/Can-Regulation-Promote-Financial-Inclusion http://hdl.handle.net/10986/31179 |
| Summary: | Despite the commitments of the
development community toward broader access to finance,
financial inclusion rates worldwide are rather
unsatisfactory. To date, around two billion adults do not
have access to basic financial services such as savings and
checking accounts. Attempting to bridge such gap between
policy objectives and outcomes, several economists have
probed the determinants of financial inclusion. This paper
contributes to the debate by investigating the role played
by financial regulation. First, the paper proposes a broad
index of regulatory quality for financial inclusion,
emphasizing the role of nontraditional delivery models, for
example, branchless banking, and actors, for example,
nonbank lending institutions. Second, the paper tests the
relationship between regulatory quality and financial
inclusion outcomes. The analysis finds that in countries
where regulatory quality is within the top quartile,
individuals are 12.4 percent more likely to have an account
at a financial institution with respect to bottom quartile countries. |
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