Why are Banks so Scarce in Developing Countries? A Regulatory and Infrastructure Perspective

Abstract:     
In developing countries, banks are simply not present where the majority of poor people live and work. This imposes burdensome access costs on the part of customers who need to travel to distant branches – and the majority of the population opts out. The paucity of banking infrastructure can be overcome by enabling banking services to be offered through everyday stores that exist in every community. This can now be done safely with today’s technology and the spread of mobile communications networks. Banking regulations need to adapt to the risk mitigation strategies that modern technology permits, allowing banks to experiment with and roll out new channels and products.

Number of Pages in PDF File: 12

Keywords: Access to Finance, Financial Inclusion, Banking Regulation, Branchless Banking

Accepted Paper Series