ACCESS TO FINANCIAL SERVICES

Not Just for Corporations: Six Microfinance Banks on Three Continents Use Global Reporting Initiative (GRI) Guidelines .  Microfinance institutions in Africa, Asia, and South America are issuing sustainability reports using GRI guidelines, as are other non-corporate entities.  SocialFunds.com, March 16, 2005. 

The Provision of Microfinance Services by Savings Banks - Selected Experiences from Africa, Asia and Latin America.

This paper discusses the experiences of savings and socially-oriented retail banks with the provision of savings, insurance and payment services to the poor. . World Savings Banks Institute, October 2004

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PAYMENT SYSTEMS

Chip Cards Ready to Roll.

South Africa’s four biggest banks are poised to issue their new chip-based cards, but some are ahead of others. Allafrica.com.  Johannesburg, March 17, 2005.

Payments and Securities Clearance and Settlement Systems in Brazil.

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Assessing Financial Access

Through Surveys of Users

An Example of Brazil

By Anjali Kumar, LCSFF

    How do we measure financial access?  Despite the relatively high quantification of many aspects of financial systems, there has been a growing realization that information on the availability and use of financial services in different populations, whether countries or regions within a country, is scant. Efforts to measure the use of financial services are being been organized from multiple perspectives. Information on the supply of financial services to a given community, through financial institutions such as banks, can be collected from regulators, such as central banks, or through surveys of banks themselves. But data from regulators cannot provide an answer to the question of who has access, and who does not. Even if a financial institution exists in a given location, it is not clear whether the poor of that region are being served. Data from financial institutions themselves can complement this, through knowledge of their clients, but are still limited in the extent to which they can capture information on those excluded from financial services.
       Questions regarding the use of financial services had to varying degrees been incorporated in instruments such as the Living Standards Measurement surveys of the World Bank. As questions on finance are integrated into a larger exercise, the scope of the financial modules of these inquiries has necessarily been limited
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Supporting the Development of Private Credit Information Bureaus
IFC increases technical assistance and invests in regional credit bureau initiatives

By Nataliya Mylenko, Peer Stein, Stefano Stoppani and Oscar Madeddu, IFC

  
         Sharing information on borrower credit histories allows lenders to improve risk management and expand lending to new market segments.  Correlation between existence of credit information registries and depth of credit markets is widely documented.  There is also evidence that the private sector is better suited to serve the needs of lenders by providing detailed credit history information and value-added services, such as credit scoring, while public credit registries, run by bank supervisors, should focus on monitoring systemic risks.

           Rationale for IFC involvement. Consumer and small business finance is of great significance to IFC, given its substantial portfolio of mid-sized banks and commitment to increasing access to financial services for the underserved. More than 40 percent of IFC’s financial markets portfolio is held in financial institutions that are doing business primarily with micro, small and medium-sized enterprises.  Growing retail and SME lending requires that client banks introduce adequate risk management and loan approval processes to ensure that growth remains healthy.   

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CREDIT INFORMATION

The Credit Bureaus’ Push Into Foreign Markets. 

While countries such as China and Russia are rapidly developing a reliance on credit, poorly developed credit reporting is slowing their advance. What will it take to clear the path? Credit & Collection World, 2005.

Credit Report Accuracy and Access to Credit.

This article tackles the complexities of data limitations on access to credit, and quantifies the effects of credit record limitations on the access to credit. Federal Reserve, by Robert B. Avery, Paul S. Calem, and Glenn B Canner.

Reforming Capital Requirements in Emerging Countries: Calibrating Basel II Using Historical Argentine Credit Bureau Data and CreditRisk.

This paper discusses how credit scoring techniques and modern credit risk portfolio models can be used to measure credit risk and check Basel II calibration for such an environment.  By Verónica Balzarotti, Christian Castro, Andrew Powell, July 2004.

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REMITTANCES

Remittances to Latin American and Caribbean Countries topped $45 Billion in 2004.

IDB reports money sent by migrant workers rose nearly 20 percent over 2003.  Latin American and Caribbean workers living abroad sent a record $45.8 billion to their homelands in 2004, up from $38 billion the previous year, the Inter-American Development Bank’s Multilateral Investment Fund (MIF) said today.  IDB Press Release.  March 22, 2005.

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