The Economic Impact of Banking the Unbanked : Evidence from Mexico

The Economic Impact of Banking the Unbanked : Evidence from Mexico

This paper examines the effects of providing financial services to low-income individuals on entrepreneurial activity, employment, and income. The analysis exploits cross-time and cross-municipality variation in the opening of Banco Azteca in Mexic...

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Bibliographic Details
Main Authors: Bruhn, Miriam, Love, Inessa
Format: Policy Research Working Paper
Language:English
Published: 2012
Subjects:
ACCESS TO CREDIT
ACCESS TO FINANCE
ACCESS TO FINANCIAL SERVICES
ANNUAL INTEREST RATE
AVAILABILITY OF CREDIT
BAD BANKS
BANK ACCOUNT
BANK BRANCH
BANK BRANCHES
BANK COMPETITION
BANK CREDIT
BANK LOANS
BANKING INDUSTRY
BANKING SECTOR
BANKING SYSTEM
BIASES
BORROWER
BUSINESS OWNER
BUSINESS OWNERS
CHIEF EXECUTIVE
COLLATERAL
COMMERCIAL BANK
COMMERCIAL BANKING
COMMERCIAL BANKS
CONSUMER
CONSUMER CREDIT
CONSUMER GOODS
CONSUMER LOANS
CONSUMERS
CREDIT ACCESS
CREDIT AVAILABILITY
CREDIT CONSTRAINTS
CREDIT HISTORIES
CREDIT PROGRAMS
CREDIT UNIONS
DEBTORS
DEVELOPMENT ECONOMICS
DOCUMENTATION REQUIREMENTS
DOWN PAYMENT
DRIVERS
EARNINGS
ECONOMIC ACTIVITY
ECONOMIC DEVELOPMENT
ECONOMIC GROWTH
EMPLOYMENT OPPORTUNITIES
ENTREPRENEURIAL ACTIVITY
ENTREPRENEURSHIP
FAMILIES
FAMILY INCOMES
FAMILY MEMBERS
FINANCIAL DEVELOPMENT
FINANCIAL NEEDS
FINANCIAL SECTOR
FINANCIAL SERVICES
FRANCHISE
GENDER
GROUP LENDING
HOUSEHOLD INCOME
HOUSEHOLDS
HUSBANDS
IDS
INCOME DISTRIBUTION
INCOME GROUPS
INCOME LEVELS
INCOMES
INCORPORATIONS
INCREASE IN INCOME
INEQUALITY
INFORMAL ECONOMY
INFORMATION TECHNOLOGY
INSTALLMENT
INSURANCE
INTEREST RATES
INTERNATIONAL BANK
INVENTORY
LABOR FORCE
LABOR MARKET
LACK OF ACCESS
LEGAL TITLE
LIMITED
LIVING STANDARDS
LOAN
LOAN OFFICER
LOAN OFFICERS
LOAN PORTFOLIO
LOAN SIZE
LOW INCOME
LOW-INCOME
LOW-INCOME CUSTOMERS
LOW-INCOME INDIVIDUALS
LOWER INTEREST RATES
LOWER-INCOME INDIVIDUALS
MARKET CONDITIONS
MASS MARKET
MERCHANTS
MICRO BUSINESS
MICRO ENTREPRENEURS
MICRO LOANS
MICROCREDIT
MICROFINANCE
MICROFINANCE INSTITUTION
MICROFINANCE INSTITUTIONS
MICROFINANCE LOAN
MINIMUM WAGE
MINIMUM WAGES
MONEY TRANSFERS
MONTHLY INCOME
MORTGAGE
MUNICIPALITIES
MUNICIPALITY
OCCUPATIONS
OPPORTUNITIES FOR WOMEN
OUTSTANDING LOANS
PARENT COMPANY
POLITICAL ECONOMY
POSSESSIONS
POVERTY ALLEVIATION
PURCHASES
RAPID GROWTH
RATES OF RETURN
REGRESSION ANALYSIS
REGULATORY FRAMEWORKS
RESEARCH ASSISTANCE
RURAL BANKS
SALES
SAVINGS
SAVINGS ACCOUNT
SAVINGS ACCOUNTS
SELF-EMPLOYMENT
SMALL BUSINESSES
SOCIAL BANKING
SOCIETY
START-UP
STATE BANKS
TOP MANAGEMENT
TRADITIONAL BANKING
UNEMPLOYED
UNEMPLOYMENT
UNEMPLOYMENT STATISTICS
UNION
UNPAID WORKERS
VILLAGE
WAGE
WORKING AGE
Online Access:http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090630083925
http://hdl.handle.net/10986/4173
Description
Summary:This paper examines the effects of providing financial services to low-income individuals on entrepreneurial activity, employment, and income. The analysis exploits cross-time and cross-municipality variation in the opening of Banco Azteca in Mexico to measure these effects with a difference-in-difference strategy. Banco Azteca opened more than 800 branches simultaneously in 2002, focusing on low-income clients. The results show that the opening of Banco Azteca led to an increase in the number of informal business owners by 7.6 percent. Total employment also increased, by 1.4 percent, and average income went up by about 7 percent.

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