Banking Services for Everyone? Barriers to Bank Access and Use Around the World

60 Pages Posted: 20 Apr 2016  

Thorsten Beck

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

Asli Demirgüç-Kunt

World Bank - Development Research Group; World Bank

Maria Soledad Martinez Peria

International Monetary Fund (IMF)

Multiple version iconThere are 2 versions of this paper

Date Written: December 2006

Abstract

Using information from 193 banks in 58 countries, the authors develop and analyze indicators of physical access, affordability, and eligibility barriers to deposit, loan, and payment services. They find substantial cross-country variation in barriers to banking and show that in many countries these barriers can potentially exclude a significant share of the population from using banking services. Correlations with bank- and country-level variables show that bank size and the availability of physical infrastructure are the most robust predictors of barriers. Further, the authors find evidence that in more competitive, open, and transparent economies, and in countries with better contractual and informational frameworks, banks impose lower barriers. Finally, though foreign banks seem to charge higher fees than other banks, in foreign dominated banking systems fees are lower and it is easier to open bank accounts and to apply for loans. On the other hand, in systems that are predominantly government-owned, customers pay lower fees but also face greater restrictions in terms of where to apply for loans and how long it takes to have applications processed. These findings have important implications for policy reforms to broaden access.

Keywords: Banks & Banking Reform, Financial Intermediation, Economic Theory & Research, Financial Crisis Management & Restructuring, Competitiveness and Competition Policy

Suggested Citation

Beck, Thorsten and Demirgüç-Kunt, Asli and Martinez Peria, Maria Soledad, Banking Services for Everyone? Barriers to Bank Access and Use Around the World (December 2006). World Bank Policy Research Working Paper No. 4079. Available at SSRN: https://ssrn.com/abstract=950134

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

Asli Demirgüç-Kunt

World Bank - Development Research Group ( email )

United States
202-473-7479 (Phone)
202-522-1155 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/ademirguckunt/

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Maria Soledad Martinez Peria

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Paper statistics

Downloads
435
Rank
52,548
Abstract Views
2,428