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Access to Finance – What Does it Mean and How Do Savings Banks Foster Access

The purpose of this study is to give an overview of the importance of access to finance for all and to record the main obstacles to access in different parts of the world. It also attempts to create a coherent framework for analysing the available data on access and to link this through to indicators of wider economic development. Having surveyed the nature and dimensions of access (or lack of it), the study goes on to review public and banking sector initiatives to improve access to finance and then looks at the critical role of the savings bank movement – socially committed retail banks, like savings banks, postal savings banks and community banks – in the provision of financial services to all strata of the population in urban and more remote areas. Finally, a policy agenda is developed for both the financial institutions that must deliver access and the public sector that must create the right environment for doing so.

The study concludes with the following viewpoints:

  • Access is an important issue but it has to be understood differently from the related issue of exclusion, as the solutions are different.
  • The savings bank movement has an instinctive sympathy for improving access and this study shows how important the movement is to sustaining what access there already is.
  • At newly identified levels of supply, savings banks account for three quarters of the 1.4 billion accessible accounts provided across developing and transition economies.
  • Moreover an economy is very unlikely to be approaching full access unless it has a strong savings bank movement or other proximity banking presence.
  • Regulators need to recognise that the governments they serve may have more at stake in improving access than commercially run banks. Regulation should be fine-tuned accordingly.
  • As always the performance of banking systems cannot be understood in isolation from the systems of political economy within which they operate. Governments are likely to do more to improve access by improving the foundations of civil society than by trying to mandate access and interfere with product design.

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