The Basic Analytics of Access to Financial Services

By Thorsten Beck, Augusto de la Torre. 2006

396 citations recorded by the source corpus.

Access to financial services, or rather the lack thereof, is often indiscriminately decried as a problem in many developing countries. The authors argue that the"problem of access"should rather be analyzed by identifying different demand and supply constraints. They use the concept of an access possibilities frontier, drawn for a given set of state variables, to distinguish between cases where a financial system settles below the constrained optimum, cases where this constrained optimum is too low, and-in credit services-cases where the observed outcome is excessively high. They distinguish between payment and savings services and fixed intermediation costs, on the one hand, and lending services and different sources of credit risk, on the other hand. The authors include both supply and demand side frictions that can lead to lower access. The analysis helps identify bankable and banked population, the binding constraint to close the gap between the two, and policies to prudently expand the bankable population. This new conceptual framework can inform the debate on adequate policies to expand access to financial services and can serve as the basis for an informed measurement of access.

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/41015603f77f599fb13593db637515154ea98a03

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Economics and Econometrics

In Finance

Citations in the corpus

Does financial literacy improve financial inclusion? Cross country evidence (2018, neutral): “These supply-side variables have been previously analyzed in the literature on financial inclusion (Allen et al., 2016; Beck et al., 2007).”
Measuring firms' access to finance (2006, background): “Beck and de la Torre (2006) have recently suggested a conceptual framework for payment and savings services based on demand and supply of financial services.”
Access to Finance (2008, background): “commercially bankable population, as well as the bottlenecks to overcome the difference between both ( Beck and de la Torre, 2007 ).”
Financial Constraints and Small and Medium Enterprises: A Review* (2020, background): “Further, by endorsing a loan application, the guarantee instrument facilitates a signal about the profit prospects of the proposed investment and effectively mobilizes the financial resources from lenders to small business borrowers (Beck and De La Torre, 2006).”
A Theoretical and Quantitative Analysis of Financial Inclusion and Economic Growth (2013, background): “The modern economic and social development agenda is based on the broad access to financial services, across the world, mainly for two reasons (Beck and Torre, 2006): (i) a large theoretical and empirical literature showing the importance of a well-developed financial system for economic…”