Access to finance refers to the possibility that individuals or enterprises can access financial services, including credit, deposit, payment, insurance, and other risk management services. Those who involuntarily have no or only limited access to financial services are referred to as the unbanked or underbanked, respectively.
Accumulated evidences have shown that financial access provides credit for the most promising firms promotes growth for enterprises through the provision of credit in the most promising firms, encourages more start ups, and enables incumbent firms to grow by exploiting growth and investment opportunities. It brings benefit to the economy benefits the economy in general by accelerating economic growth, intensifying competition, as well as boosting the demand for labor. In turn, Tthis helps those at the raises income for those in the lower end of the income distribution in reducing income inequality and poverty.
The lack of financial access limits the range of services and credits for household and enterprises. Poor individuals and small enterprises need to rely on their personal wealth or internal resources to invest in their education and businesses, which limits their full potential and leading to the cycle of persistent inequality and diminished growth.
Access to finance varies greatly between countries and ranges from about 5 percent of the adult population in Papua New Guinea and Tanzania to 100 percent in the Netherlands (for a comprehensive list of estimated measures of access to finance across countries, see Demirgüç-Kunt, Beck, & Honohan, 2008, pp. 190–191).
Read more about Access To Finance: Defining and Measuring Access To Financial Services, Formal and Informal Financial Services, Barriers and Policies To Increase Access, External Links, See Also
Famous quotes containing the words access to, access and/or finance:
“A girl must allow others to share the responsibility for care, thus enabling others to care for her. She must learn how to care in ways appropriate to her age, her desires, and her needs; she then acts with authenticity. She must be allowed the freedom not to care; she then has access to a wide range of feelings and is able to care more fully.”
—Jeanne Elium (20th century)
“Knowledge in the form of an informational commodity indispensable to productive power is already, and will continue to be, a major—perhaps the major—stake in the worldwide competition for power. It is conceivable that the nation-states will one day fight for control of information, just as they battled in the past for control over territory, and afterwards for control over access to and exploitation of raw materials and cheap labor.”
—Jean François Lyotard (b. 1924)
“A bank is a confidence trick. If you put up the right signs, the wizards of finance themselves will come in and ask you to take their money.”
—Christina Stead (1902–1983)