access to finance
Last year I speculated about the potential impact of the financial crisis on the environment for microfinance.
The 2006 and 2007 Doing Business reports both found that Armenia has been reforming in the area of credit. Armenian lenders can now rely on a credit registry when deciding on loan applications. But have these reforms really had an impact?
Yesterday I attended the World Bank's book launch of Bringing Finance to Pakistan's Poor: Access to Finance for Small Enterprises and the Underserved. The authors, Tatiana Nenova and Ceclie Thioro Niang, interviewed 10,000 households from across Pakistan's geographic and socio-economic landscape, including both men and women.
I have been comparing the differences between manufacturing and services firms in the informal or unregistered sector. There is a rich literature on how and why these firms differ, but it is based on firms in the formal or registered sector. It’s a moot point whether differences between manufacturing and service firms in the formal sector also hold for the informal sector. For example, differences in scale economies between service and manufacturing firms are known to be important for the formal sector, but this is not immediately obvious when comparing these firms in the informal sector.
The common perception of the informal sector is that unregistered businesses are not as efficient as registered or formal businesses. One proposed reason for this is that, by not being registered, informal businesses face severe hardships in accessing finance, markets, public services and government programs. Hence, the usual policy response to informality is simple: try and encourage informal businesses to register.
The World Bank has released its latest Finance and PSD Impact Newsletter. The paper looks at the impact of large-scale bank expansion in Mexico, evaluating the effects of increased access to finance for low-income borrowers.
China looks set to see a boom in access to finance since the passage in 2007 of the Property Rights Law. Last week, the Financial Times reported on the newfound ability of farmers to monetise their land. Some farmers are selling to larger, more efficient companies, while others are taking advantage of the opportunity to use their land as collateral:
For those who are excited by new datasets (come on, I know you're out there...), these last few weeks have been a bonanza. One month ago, the World Bank Group released the Financial Infrastructure report, which provides cross-country measurements of core financial institutions such as credit bureaus and payment systems.
Editor’s Note: Murat Seker and Federica Saliola work in the World Bank's Financial and Private Sector Development Vice Presidency. This blog is a summary of the Country Note prepared for the World Bank's Enterprise Survey. The note for Turkey and several other ECA region countries can be seen at www.enterprisesurveys.org