Financial Exclusion

This text is concerned with the increasingly important and problematic area of financial exclusion, broadly defined as the inability and/or reluctance of particular societal groups to access mainstream financial services. This has emerged as a major international policy issue. There is growing evidence that deregulation in developed financial sectors improves financial inclusion for some societal groups (more products become available to a bigger customer base), but may at the same time exacerbate it for others (for example, by emphasizing greater customer segmentation and more emphasis on risk-based pricing and 'value added'). In developing countries access to financial services is typically limited and therefore providing wider access to such services can aid financial and economic development. This is the first text to analyze financial exclusion issues in different parts of the world and it covers the various public and private sector mechanisms that have been advanced to help eradicate this problem.

This text is concerned with the increasingly important and problematic area of financial exclusion, broadly defined as the inability and/or reluctance of particular societal groups to access mainstream financial services. This has emerged as a major international policy issue. There is growing evidence that deregulation in developed financial sectors improves financial inclusion for some societal groups (more products become available to a bigger customer base), but may at the same time exacerbate it for others (for example, by emphasizing greater customer segmentation and more emphasis on risk-based pricing and 'value added'). In developing countries access to financial services is typically limited and therefore providing wider access to such services can aid financial and economic development. This is the first text to analyze financial exclusion issues in different parts of the world and it covers the various public and private sector mechanisms that have been advanced to help eradicate this problem.

List of Tables List of Figures Glossary of Acronyms PART 1: INTRODUCTION Aims and Objectives PART 2: NATURE, CONSEQUENCES AND POLICY REACTIONS: AN OVERVIEW Introduction Nature and Causes The Financially Excluded Consequences of Financial Exclusion US Experiences Responding to Financial Exclusion Conclusions PART 3: UK EXPERIENCES Introduction Financial Exclusion in the UK and the Nature of Excluded Groups Background and Types of Indicators Why is Financial Exclusion Occurring in the UK? Excluded Groups and Products Barriers to Financial Inclusion Consequences of Financial Exclusion PART 4: TACKLING FINANCIAL EXCLUSION IN THE UK Introduction Government and Financial Sector Partnership Universal Banking and Basic Banking Services Promoting Financial Literacy and Closing the Information Gap Tailoring Products and Strategies Other Institutional Arrangements SMEs and Micro Credit (Microfinance) Regulation and Financial Exclusion Conclusions PART 5: FINANCIAL EXCLUSION IN THE US Introduction Nature and Extent of the Problem Causes and Consequences Repsonses to Financial Exclusion in the US A Note on Select Bank Trends and Development Conclusion: Bank Strategic Implications PART 6: FINANCIAL EXCLUSION IN EUROPE Introduction Policy and Strategic Context Select Comparative Data Responding to Financial Exclusion in Europe Market: Spain, Greece, Ireland and Italy Voluntary Role of Banks: France, Germany and Belgium Government as Mediator: The UK and the Attempt in France Government as Legislator: France, Portugal and Sweden Conclusions PART 7: EUROPEAN POLICY ON FINANCIAL EXCLUSION AND BANK STRATEGIES Introduction Market Context and European Policy Responses Historical and Institutional Settings Policy Responses to Financial Exclusion Bank Strategies and Products The Contribution to Economic Theory Conclusion PART 8: FINANCIAL EXCLUSION IN DEVELOPING COUNTRIES Introduction Features of Financial Exclusion in Developing Countries Rural Economies and Financial Underdevelopment Exclusion and Financial Development Financial Underdevelopment and the Finance-growth nexus Financial Development is Pro-poor Mechanisms of Financial Inclusiuon in Developing Countries: Informal Financial Networks and Microfinance Rotating Saving and Credit Associations (ROSCAs) The Microfinance Revolution A Note on the Microfinance Experience in Bolivia Development of Formal Intermediaries: Some Policy Lessons Conclusions PART 9: FINANCIAL EXCLUSION - AREAS FOR FURTHER STUDY Introduction Areas for Further Study References