Barriers and Policies To Increase Access
However, in many countries financial access is still limited to only 20–50 percent of the population, excluding many poor individuals and SMEs. Many recents could explain the limited financial access especially among the poor. First, the poor lack the education and knowledge needed to understand financial services that are available to them. Second, loan officers might find it unprofitable to serve the small credit needs and transaction volume of the lower-income population. Additionally, banks may not be geographically accessible for the poor since financial institutions are likely to be located in richer neighborhoods. The poor are also burdened by lack of collateral and inability to borrow against their future income because their income streams tend to be hard to track and predict.
In light of the lack of financial access for the poor, over the past few decades developments in microfinance institutions have managed to provide financial services to some of the world’s poorest, and achieved good repayments.
There are still work to be done to build inclusive financial systems. This includes taking advantage of the technological advances in developing financial infrastructure to lower transaction costs, encouraging transparency, openness and competition to incentivize current institutions to expand service coverage, and enforcing prudential regulations in order to provide the private sector with the right incentives.
Read more about this topic: Access To Finance
Famous quotes containing the words barriers, policies, increase and/or access:
“... so far from entrenching human conduct within the gentle barriers of peace and love, religion has ever been, and now is, the deepest source of contentions, wars, persecutions for conscience sake, angry words, angry feelings, backbitings, slanders, suspicions, false judgments, evil interpretations, unwise, unjust, injurious, inconsistent actions.”
—Frances Wright (17951852)
“... [Washington] is always an entertaining spectacle. Look at it now. The present President has the name of Roosevelt, marked facial resemblance to Wilson, and no perceptible aversion, to say the least, to many of the policies of Bryan. The New Deal, which at times seems more like a pack of cards thrown helter skelter, some face up, some face down, and then snatched in a free-for-all by the players, than it does like a regular deal, is going on before our interested, if puzzled eyes.”
—Alice Roosevelt Longworth (18841980)
“There is held to be no surer test of civilisation than the increase per head of the consumption of alcohol and tobacco. Yet alcohol and tobacco are recognisable poisons, so that their consumption has only to be carried far enough to destroy civilisation altogether.”
—Havelock Ellis (18591939)
“The nature of womens oppression is unique: women are oppressed as women, regardless of class or race; some women have access to significant wealth, but that wealth does not signify power; women are to be found everywhere, but own or control no appreciable territory; women live with those who oppress them, sleep with them, have their childrenwe are tangled, hopelessly it seems, in the gut of the machinery and way of life which is ruinous to us.”
—Andrea Dworkin (b. 1946)