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Financial Sector

Financial inclusion of women in five charts

Nina Vucenik's picture

Languages: EspañolFrançais,  عربي


One billion women – more than 40% of the women around the world – don’t have access to formal financial services, according to Global Findex.

The gender finance gap remains at 9% in developing countries, although in some parts of the world it is much higher, according to the 2014 Global Findex data.

Women are 20% less likely than men to have a bank account and 17% less likely to have borrowed money formally.

How financially included are women in the world?


Focusing on Universal Financial Access by 2020 in 25 Countries

To reach financial inclusion, the World Bank Group and partners are focusing on 25 countries where 73% of all financially excluded people live, under the Universal Financial Access by 2020 initiative.

The UFA2020 goal is to enable access for all adults, women and men alike, to a transaction account through which they can access other financial services -- such as savings, credit or insurance -- that can help improve the quality of their lives.



The following 4 charts explain how financially included women are in those 25 countries, according to Findex data.

The political economy of bank lending: evidence from an emerging market

Claudia Ruiz's picture

Our paper studies the existence of political rents in bank lending in Mexico. Unlike prior studies examining political rent seeking in public sector banks, we focus on an economy with a fully privatized banking sector where the existence of political rent seeking is not obvious.

The data that we use corresponds to the universe of commercial bank loans in Mexico from 2003 to 2012. We classify firms as politically connected if they are located in a state that elected a senator who at a particular time chaired an important senate committee. 1 We then narrow down our definition of political connection by focusing on firms that, in addition to being headquartered in the same state, operate in an industry related to the purview of the chairman’s commission, or are located in the same municipality in which the chairman lives. Having this classification of political connection allows us to exploit within-firm variation over time, and compare a firm’s loan terms and performance when it is politically connected and when it is not.

Do rich and poor countries have different approaches to counter-cyclical spending?

Francisco G. Carneiro's picture
Understanding Macroeconomic Volatility: Part 2

The fact is that a government can soften a recession by increasing spending (the counter-cyclical approach) to raise demand and output. If government reduces spending (the pro-cyclical approach), the likely result is a deeper recession.

Bribery and limited access to banking are challenges for Afghan private firms

Arvind Jain's picture

The World Bank Group’s Enterprise Surveys benchmark the business environment based on actual experiences of firms. In a new blog series we kicked off last week, we’re sharing these findings from recently analyzed surveys conducted through extensive face-to-face interviews with managers and owners of firms in several countries.
 
In this post we focus on Afghanistan. We’ve conducted a survey with 410 firms across five regions and four business sectors—manufacturing, construction, retail, and services.

The International Monetary Fund (IMF) has noted that considerable political and security uncertainties have posed challenges for Afghanistan. Furthermore, the financial sector has been vulnerable with eight out of 15 banks classified as weak in late 2014. Within this context, the Afghanistan Enterprise Surveys (ES) shed light on several interesting findings:

Corruption is a challenge

According to the Afghanistan Enterprise Survey, firms face almost a 50 percent chance of having to pay a bribe if they applied for an electricity connection, tried to obtain permits, or met with government officials for tax purposes (“Bribery incidence”).  This is more than double of what private firms in landlocked developing countries experience on average.
 

Remittances and integrity: how to exist in harmony

Emily Rose Adeleke's picture

Page also available: French, Spanish



How do countries ensure that remittance service providers – who are often serving the world’s poorest people – mitigate their risk for abuse by money launderers and terrorist organizations?
 
This important question is addressed by new Guidance from the Financial Action Task Force (FATF), the international standard-setting body for anti-money laundering and combating the financing of terrorism (AML/CFT).
 
The United Nations estimates that developing countries received over US$400 billion in remittances from migrants living abroad in 2014. These funds are often the first financial service that migrants and their families use, so it is important that people can send and receive funds with relative ease and at reasonable cost. However, remittance service providers and the governments that supervise them, must ensure that they are not abused by parties undertaking illegitimate activities such as money laundering or terrorist financing.  

To grow sustainably, cities first need to get their finances right

Ede Ijjasz-Vasquez's picture
Local and municipal governments often operate with limited financial resources, yet they are responsible for delivering an ever-expanding range of infrastructure and services. In many countries, decentralization also tends to put additional pressure on municipal finances, as cities and towns are increasingly expected to take the lead in implementing national policies locally. Yet, this transfer of responsibilities from the national to the local level often does not come with an adequate transfer of resources.
 
In other words, cities are expected to "do more with less"... This can only happen if local government practitioners have the right tools and knowledge to manage their resources as strategically and efficiently as possible. To help cities get their financial house in order, the World Bank has developed the Municipal Finances Handbook (available in English and Spanish), which provides government officials with extensive guidance on controlling expenditures, strengthening revenues, mobilizing external funds, achieving creditworthiness, and adopting good borrowing practices.
 
Lead Urban Specialist Catherine Farvacque-Vitkovic tells us more about the handbook and the associated e-learning course: “Municipal Finances - A Learning Program for Local Governments”.
 
Please note the next edition of our online course will run from March 30 - May 23, 2016. Click here to learn more and sign up (registration ends March 30).

Solving payments interoperability for universal financial access

Massimo Cirasino's picture


Interoperability was a trending topic at this week’s Mobile World Congress (MWC) 2016.

Payments are often the first and most used financial service.

Getting payment products to “understand” each other, or to be “interoperable,” is a big challenge to solve if we want to expand overall digital services and financially include the 2 billion people worldwide who are currently excluded from the formal financial system.

Making it easy for people to access transaction accounts and payment services matters.

We see interoperability as a means for people worldwide to make electronic payments in a convenient, affordable, fast, seamless and secure way through a transaction account.

When payment systems are interoperable, they allow two or more proprietary platforms or even different products to interact seamlessly.  Interoperability can promote competition, reduce fixed costs and enable economies of scale that help ensure the financial viability of the service and make payment services more convenient.  

Access to finance is biggest challenge for firms in Namibia

Joshua Wimpey's picture

The private sector continues to be a critical driver of job creation and economic growth. However, several factors can undermine the private sector and, if left unaddressed, may impede development.  Through extensive face-to-face interviews with managers and owners of firms, the World Bank Group's Enterprise Surveys benchmark the business environment based on actual experiences of firms. A series of blogs, starting today, share the findings from recently analyzed surveys conducted in several countries.

The Namibia Enterprise Surveys consisted of 580 interviews with firms across three regions and three business sectors – manufacturing, retail, and other services. So what are some key highlights from the surveys?

Exports take on average 8 days to clear through customs but varies according to firm size
In 2013, it took a firm in Namibia about eight days to clear exports through customs, which is considerably more than the two days it took in 2006. Despite this increase, the average time to clear direct exports through customs is still about the same as in the upper middle income countries (8 days) and lower than the Sub-Saharan Africa regional average (10 days). Moreover, there is a wide variation across firm size. For a small firm, it takes about 17 days on average to clear exports through customs, compared to around six days for medium-sized firms and about two days for large firms.

Clearing imports, in contrast, through customs is considerably faster in Namibia (five days) than the average for upper middle income countries (11 days) and Sub-Saharan Africa average (17 days).


 

Building alliances, gaining public trust: Chile’s financial management reforms

Dmitri Gourfinkel's picture

Also available in: Español

Santiago de Chile. Photo: alobos Life via Flickr (under CC license) 


Note from the editors: The following is an interview with Patricia Arriagada, former acting Comptroller General of Chile, and Patricio Barra Aeloiza, Head of Accounting Analysis Division of the Comptroller General Office, who have been instrumental in recent reforms of public financial management systems in Chile.

Starting in 2010, Chile embarked on a journey to improve public sector accounting by converging to an international standard of financial reporting by 2016. The country expects to produce its first fully compliant financial statements in 2019. One main objective of this reform is to ensure that financial information generated by the government accounting system is comprehensive, reliable, and useful for decision-making. Another is to increase the levels of fiscal and financial transparency and accountability in the public sector.
 

Patricia Arriagada,
former acting Comptroller General
of Chile

These reforms were driven by the Comptroller General office, is what is known as a “Supreme Audit Institution,” and is responsible for monitoring revenues and expenditures in all parts of the government – in particular, ensuring the quality and credibility of financial management and financial reporting.

Tame macroeconomic volatility to boost growth and reduce hardship in the Caribbean

Francisco G. Carneiro's picture
Volatility in financial markets gets wide attention in the public eye. Less noticed is what we in the development world call macroeconomic volatility—faster-than-desired swings in the broad forces which shape an economy. Think investment, government spending, interest rates, foreign trade and the like.

There are three key questions to analyze: how do these forces interact, what is their effect on overall growth, and what policies are best to follow? All this is of more than academic interest: macroeconomic volatility can bring substantial hardships to millions of people

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