Access to finance is the ability of individuals or enterprises to obtain financial services, including credit, deposit, payment, insurance, and other risk management services.[1] Those who involuntarily have no or only limited access to financial services are referred to as the unbanked or underbanked, respectively.[1][2]
Accumulated evidence has shown that financial access promotes growth for enterprises through the provision of credit to both new and existing businesses. It benefits the economy in general by accelerating economic growth, intensifying competition, as well as boosting demand for labor. The incomes of those in the lower end of the income ladder will typically rise hence reducing income inequality and poverty.[3]
The lack of financial access limits the range of services and credits for household and enterprises. Poor individuals and small enterprises need to rely on their personal wealth or internal resources to invest in their education and businesses, which limits their full potential and leading to the cycle of persistent inequality and diminished growth.[4]
Access to finance varies greatly between countries and ranges from about 5 percent of the adult population in Papua New Guinea and Tanzania to 100 percent in the Netherlands[1] (for a comprehensive list of estimated measures of access to finance across countries, see Demirgüç-Kunt, Beck, & Honohan, 2008, pp. 190–191[1]).
^ abcdDemirgüç-Kunt, A., Beck, T., & Honohan, P. (2008). Finance for All?: Policies and Pitfalls in Expanding Access. Washington, D.C.: The World Bank. Retrieved March 21, 2008, from http://siteresources.worldbank.org/INTFINFORALL/Resources/4099583-1194373512632/FFA_book.pdf
^Richardson, B. (2008, July 15). Enhancing Customer Segmentation Processes and Optimising Adoption Techniques to Support Efforts to "Bank the Unbanked." Presentation given during the Mobile Banking & Financial Services Africa conference in Johannesburg, South Africa.
^Beck, Demirgüç-Kunt and Levine, 2007 and Beck, Levine, and Levkov, 2010
^Demirgüç-Kunt, A., Beck, T., & Honohan, P. (2008). Finance for All?: Policies and Pitfalls in Expanding Access. Washington, D.C.: The World Bank.
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