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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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

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spelling	okr-10986-41732021-04-23T14:02:15Z The Economic Impact of Banking the Unbanked : Evidence from Mexico Bruhn, Miriam Love, Inessa 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 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. 2012-03-19T19:11:15Z 2012-03-19T19:11:15Z 2009-06-01 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 English Policy Research working paper ; no. WPS 4981 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper Latin America & Caribbean Latin America & Caribbean North America America Mexico
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	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
spellingShingle	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 Bruhn, Miriam Love, Inessa The Economic Impact of Banking the Unbanked : Evidence from Mexico
geographic_facet	Latin America & Caribbean Latin America & Caribbean North America America Mexico
relation	Policy Research working paper ; no. WPS 4981
description	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.
format	Publications & Research :: Policy Research Working Paper
author	Bruhn, Miriam Love, Inessa
author_facet	Bruhn, Miriam Love, Inessa
author_sort	Bruhn, Miriam
title	The Economic Impact of Banking the Unbanked : Evidence from Mexico
title_short	The Economic Impact of Banking the Unbanked : Evidence from Mexico
title_full	The Economic Impact of Banking the Unbanked : Evidence from Mexico
title_fullStr	The Economic Impact of Banking the Unbanked : Evidence from Mexico
title_full_unstemmed	The Economic Impact of Banking the Unbanked : Evidence from Mexico
title_sort	economic impact of banking the unbanked : evidence from mexico
publishDate	2012
url	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
_version_	1764390258350227456

The Economic Impact of Banking the Unbanked : Evidence from Mexico

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