The Urban Unbanked in Mexico and the United States

60 Pages Posted: 20 Apr 2016  

John Caskey

Swarthmore College - Economics Department; Bard College - The Levy Economics Institute

Clemente Ruiz Duran

Universidad Nacional Autónoma de México

Tova Maria Solo

World Bank - Latin America and Caribbean Region

Date Written: February 1, 2006

Abstract

This paper examines the ways in which lower-income households obtain basic financial services in urban communities in Mexico and the United States. And it discusses the efforts that private sector and government organizations are making to lower the cost or improve the quality of those services. The paper summarizes available information on these issues and assesses the rationale and challenges facing the strategies that both countries are using to improve the financial services available to lower-income households, giving particular attention to unbanked households, meaning households that do not have deposit accounts with any regulated deposit-taking institution, and also to lower-income households in large urban areas. In comparing the experiences of the two countries, the paper reviews the extent to which lower-income households are unbanked, their use of non-bank financial services, and strategies for improving financial services to the unbanked. The underlying differences between the countries' typical household incomes - national income per capita in Mexico in 2002 was US $8,540, compared with $35,060 in the United States (World Bank 2003) - may also influence the difference in percentage of unbanked - 9.1 percent of families in the United States compared with 76.4 percent found in a recent study in Mexico City.

Keywords: Banks & Banking Reform, Economic Theory & Research, Financial Intermediation, Remittances, Housing & Human Habitats

Suggested Citation

Caskey, John and Duran, Clemente Ruiz and Solo, Tova Maria, The Urban Unbanked in Mexico and the United States (February 1, 2006). World Bank Policy Research Working Paper No. 3835. Available at SSRN: https://ssrn.com/abstract=922961

John Caskey (Contact Author)

Swarthmore College - Economics Department ( email )

Swarthmore, PA 19081
United States

Bard College - The Levy Economics Institute

Blithewood
Annandale-on-Hudson, NY 12504
United States

Clemente Ruiz Duran

Universidad Nacional Autónoma de México ( email )

Circuito Mario de la Cueva s/n
Lomas de las Palmas, 52760
Mexico

Tova Maria Solo

World Bank - Latin America and Caribbean Region ( email )

1818 H Street NW
Washington, DC 20433
United States

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