Use of Banking Services in Emerging Markets - Household-Level Evidence

50 Pages Posted: 20 Jul 2011

See all articles by Thorsten Beck

Thorsten Beck

City University London - Sir John Cass Business School; Tilburg University - European Banking Center, CentER

Martin Brown

University of St. Gallen

Multiple version iconThere are 2 versions of this paper

Date Written: July 2011

Abstract

This paper uses survey data for 60,000 households from 29 transition economies in 2006 and 2010 to explore how the use of banking services is related to household characteristics, as well as to bank ownership, deposit insurance and creditor protection. At the household level we find that the holding of a bank account, a bank card, or a mortgage increases with income and education in most countries and find evidence for an urban-rural gap. The use of banking services is also related to the religion and social integration of a household as well as the gender of the household head. Using the within-country variation between 2006 and 2010, we find that the privatization of state-owned banks and an increase in market share of foreign banks are associated with a stronger use of banking services. Foreign bank ownership is also associated with a higher use of bank services among highincome households and households with formal employment. State ownership, by contrast is hardly associated with more outreach to poorer households. More generous deposit insurance and stronger creditor rights also foster the use of banking services among the urban, rich, better educated and formally employed.

Keywords: access to finance, bank ownership, creditor protection, deposit insurance, household finance

JEL Classification: G18, G2, O16, P34

Suggested Citation

Beck, Thorsten and Brown, Martin, Use of Banking Services in Emerging Markets - Household-Level Evidence (July 2011). CEPR Discussion Paper No. DP8475. Available at SSRN: https://ssrn.com/abstract=1889998

Thorsten Beck (Contact Author)

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Tilburg University - European Banking Center, CentER ( email )

PO Box 90153
Tilburg, 5000 LE
Netherlands

Martin Brown

University of St. Gallen ( email )

Unterer Graben 21
St. Gallen, CH-9000
Switzerland

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