Banking the world : empirical foundations of financial inclusion

About 2.5 billion adults, just over half the world's adult population, lack bank accounts. If we are to realize the goal of extending banking and other financial services to this vast "unbanked" population, we need to consider not only such product innovations as microfinance and mobile banking but also issues of data accuracy, impact assessment, risk mitigation, technology adaptation, financial literacy, and local context. In Banking the World , experts take up these topics, reporting on new research that will guide both policy makers and scholars in a broader push to extend financial markets.

The contributors consider such topics as the complexity of surveying people about their use of financial services; evidence of the impact of financial services on income; the occasional negative effects of financial services on poor households, including disincentives to work and overindebtedness; and tools for improving access such as nontraditional credit scores, financial incentives for banking, and identification technologies that can dramatically reduce loan default rates.

Author Notes

Robert Cull is a Lead Economist in the Finance and Private Sector Development Team of the World Bank's Development Research Group

Asli Demirgüç-Kunt is Director of Development Policy in the World Bank's Development Economics Vice Presidency and Chief Economist of the Financial and Private Sector Development Network (FPD). She is the coeditor of Financial Structures and Economic Growth: A Cross-Country Comparison of Banks, Markets, and Development (MIT Press, 2001).

Jonathan Morduch is Professor of Public Policy and Economics at New York University's Wagner Graduate School of Public Service. He is the coauthor of The Economics of Microfinance (MIT Press) and Portfolios of the Poor: How the World's Poor Live on $2 a Day .

Robert Cull is a Lead Economist in the Finance and Private Sector Development Team of the World Bank's Development Research Group

Asli Demirgüç-Kunt is Director of Development Policy in the World Bank's Development Economics Vice Presidency and Chief Economist of the Financial and Private Sector Development Network (FPD). She is the coeditor of Financial Structures and Economic Growth: A Cross-Country Comparison of Banks, Markets, and Development (MIT Press, 2001).

Jonathan Morduch is Professor of Public Policy and Economics at New York University's Wagner Graduate School of Public Service. He is the coauthor of The Economics of Microfinance (MIT Press) and Portfolios of the Poor: How the World's Poor Live on $2 a Day .

Jonathan Morduch is Professor of Public Policy and Economics at New York University's Wagner Graduate School of Public Service. He is the coauthor of The Economics of Microfinance (MIT Press) and Portfolios of the Poor: How the World's Poor Live on $2 a Day .

Robert Cull is a Lead Economist in the Finance and Private Sector Development Team of the World Bank's Development Research Group

Asli Demirgüç-Kunt is Director of Development Policy in the World Bank's Development Economics Vice Presidency and Chief Economist of the Financial and Private Sector Development Network (FPD). She is the coeditor of Financial Structures and Economic Growth: A Cross-Country Comparison of Banks, Markets, and Development (MIT Press, 2001).

Jonathan Morduch is Professor of Public Policy and Economics at New York University's Wagner Graduate School of Public Service. He is the coauthor of The Economics of Microfinance (MIT Press) and Portfolios of the Poor: How the World's Poor Live on $2 a Day .

Robert Cull and Ash Demirgüç-Kunt and Jonathan MorduchAlberto Chaia and Aparna Dalal and Tony Goland and Maria Jose Gonzalez and Jonathan Morduch and Robert SchiffPatrick Honohan and Michael KingRobert Cull and Kinnon ScottDaryl CollinsMiriam Bruhn and Inessa LoveStijn Claessens and Erik FeijenAsh Demirgüç-Kunt and Leora F. Klapper and Georgios A. PanosNguyen Viet Cuong and Marrit van den Berg and Robert LensinkThorsten Beck and Katie Kibuuka and Erwin R. TiongsonDean Karlan and Sendhil Mullainathan and Omar RoblesShawn Cole and Thomas Sampson and Bilal ZiaXavier Giné and Jessica Goldberg and Shalini Sankaranarayanan and Peter Sheerin and Dean YangAnni Heikkilä and Panu Kalmi and Olli-Pekka RuuskanenJonathan Morduch

1 Introduction: Banking the World	p. 1
I Where Are We Now?	p. 17
2 Half the World Is Unbanked	p. 19
II Better Data	p. 43
3 Cause and Effect of Financial Access: Cross-Country Evidence from the FinScope Surveys	p. 45
4 How to Ask Households about Financial Services: Experimental Evidence from Ghana and Timor-Leste	p. 85
5 Going with the Flow: Measuring Financial Usage in Poor Households	p. 109
III Creating Impact	p. 135
6 The Economic Impact of Expanding Access to Finance in Mexico	p. 137
7 Finance and Hunger: Empirical Evidence of the Agricultural Productivity Channel	p. 157
8 Entrepreneurial Finance in the Western Balkans: Characteristics of the Newly Self-Employed in Albania, Bosnia and Herzegovina, and Serbia	p. 211
IV Cautionary Tales	p. 265
9 The Impact of International Remittances on Income, Work Efforts, Poverty, and Inequality: Evidence from Vietnam Household Living Standard Surveys	p. 267
10 Mortgage Finance in Central and Eastern Europe-Opportunity or Burden?	p. 305
V More than Products	p. 391
11 Measuring Personality Traits and Predicting Loan Default with Experiments and Surveys	p. 393
12 Valuing Financial Literacy	p. 415
13 Use of Biometric Technology in Developing Countries	p. 429
14 Accessing Credit from Banks, Microfinance Institutions, and Informal Groups: What Is the Role of Social Capital?	p. 447
VI Conclusion	p. 467
15 Ten Research Questions	p. 469
Contributors	p. 483
Index	p. 485

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Table of Contents