ACCESS TO FINANCIAL SERVICES

Cost-Effective Social Performance Management - Meeting the Social and Financial Goals of Microfinance.  

Many investors in microfinance institutions (MFIs) are interested to know not only how sustainable these organisations are, but also how they are contributing to broader objectives, such as reducing poverty and reaching the Millennium Development Goals. This note presents a framework for assessing the social performance of MFIs. Imp-Act 2004.

Downscaling Institutions and Competitive Microfinance Markets:  Reflections and Case-Studies from Latin America.

  By Siddhartha H. Chowdri, August 2004.

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PAYMENT SYSTEMS

State Bank of Pakistan issues draft proposals: Payment Systems and Electronic Fund Transfers Act, 2005. 

The News International, Pakistan, January 8, 2005. 

Opportunities to Improve Payment Services: Results from a Survey of Large Corporations.  

This study attempts to improve the process of identifying what users of payments services want. Federal Reserve – Bank of New York.  By Sandy Krieger and Michele Braun, July 2004.

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The High Cost of Being Unbanked

Data from Mexico, Colombia and Brazil shows urban poor pay large portion of income for basic financial services

By Tova Solo, LCSFU

   Micro-economists and students of socio-economic data often refer to a “vicious circle” of poverty, reflecting the way the poor tend to pay more for basic services, (water, sanitation, etc.), for basic needs (shopping piecemeal in poor neighborhoods is more costly than buying in bulk supermarkets) and for transportation or in travel time (low-income neighborhoods tend to be located far from the work, schools and markets). New data is showing how the poor also pay more for financial services. These costs can cut significantly into already meager earnings, since the “unbanked” as a group overlap with low-income groups, adding to the difficulties of escaping from the vicious circle and moving towards upward mobility. 
      Data gathered during the past four years in Mexico, Colombia and Brazil suggests that in these countries somewhere between 65 and 85% of urban households do not hold any kind of deposit account in any formal financial institution. ^|  more

Collecting Better Data on Access to Financial Services

DFID’s approach to this challenging issue

By Karen Ellis, Department for International Development (DFID), Economic Advisor, Financial Sector Team

  

    A large body of evidence now exists which shows that financial sector development is important for growth in developing countries.  And there is growing evidence of more direct linkages between financial sector development and poverty reduction, inequality, infant mortality, and child labour. The literature on these issues was reviewed in the recent DFID Working Paper “The Importance of Financial Sector Development for Growth and Poverty Reduction”.  

     Most of these studies use traditional, macro measures of the financial sector, such as the total value of bank deposits, or private credit, which may not be very strongly related to the level of access to financial services.  Such measures may therefore capture only the indirect impact of financial sector development on poverty through its impact on growth, as in many developing countries very few poor people have access to formal financial services. | more

CREDIT INFORMATION

Benefits and Pitfalls of Statistical Credit Scoring for Microfinance.

  Although scoring will not replace joint-liability groups nor loan officers, it does have enough predictive power to significantly improve the evaluation of the risks of loan applicants. This paper discusses what scoring can and cannot do, the data that microlenders should start to collect from loan applicants, and outlines the basic steps in a scoring project. By Mark Schreiner, December, 2004.

Credit Information Infrastructure and Political Economy Issues in South Africa.   

Chapter entitled "South Africa: Technology and Access to Financial Services" examines low-income South Africans’ access to financial services and institutions, the need for greater "equality of access" and how technology can be utilized to provide greater access. World Bank working paper. By Leora Klapper, January, 2005.

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REMITTANCES

UTI Bank ties up with Remit2India. 

UTI Bank in association with Remit2India has launched the Remittance Card, which is designed to provide increased convenience, utility and safety to Indians who receive remittances from other countries. India Infoline.com, January 6, 2005.

Remittances, Microfinance And Community Informatics-Development And Governance Issues.   

Univ. Metropolitana, México, D.F. By Scott S. Robinson, June 2004.

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