The World Bank Research Observer Advance Access published online on February 27, 2009
The World Bank Research Observer, doi:10.1093/wbro/lkn008
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Access to Financial Services: Measurement, Impact, and Policies
Correspondence: corresponding author, ademirguckunt{at}worldbank.org
In many developing countries less than half the population has access to formal financial services, and in most of Africa less than one in five households has access. Lack of access to finance is often the critical mechanism for generating persistent income inequality, as well as slower economic growth. Hence expanding access remains an important challenge across the world, leaving much for governments to do. However, not all government actions are equally effective and some policies can even be counterproductive. This paper sets out principles for effective government policy on broadening access, drawing on the available evidence and illustrating with examples. The paper concludes with directions for future research.