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Financial Sector

How digital financial services boost women’s economic opportunities

Leora Klapper's picture

Imagine having to skip work every month to travel to the city center just to pay your electricity bill or your child’s school fee? Would you not worry if your income relied on remittances and you were unable to pay rent because they were tied up in a network of agents? And wouldn't it frustrate you if you didn’t have a say in how your salary was spent or invested?

Having a bank account could help in all of these situations. Most of us probably have auto-pay set up so we don't need to worry about our monthly bill payments or money transfers. But the conveniences we take for granted are out of reach for the world's 1.1 billion women who lack an account. According to World Bank’s Global Findex database, men in developing countries are 9 percentage points more likely than women to own an account. The gap is largest in South Asia, where only 37 percent of women have an account compared with 55 percent of men.

Stock-markets lead to more FDI...or is it vice-versa?

Fulbert Tchana Tchana's picture
Most studies on the relationship between foreign direct investments (FDI) and financial market development focus on financial market development as a link between FDI and economic growth. However at present our disciple has no deep understanding of direct causality between FDI and financial market development, especially in emerging markets, where financial markets are in the development stage.

Three years ago, 2.5b adults were unbanked, compared to 2b today

LTD Editors's picture
The Global Findex, launched last month, is a massive database that tracks account ownership and use, savings, borrowing, and payments around the world.  Jake Kendall, Deputy Director of Research and Innovation on the Financial Services for the Poor team at the Bill & Melinda Gates Foundation, and World Bank Lead Economist Leora Klapper, recently wrote a blog post highlighting key facts and figures, some of which are: 
  • Sixty-two percent of the world’s adult population has an account, up from 51 percent in 2011
  • In developing economies, account ownership rose disproportionately among adults living in the poorest 40 percent of households.
  • Worldwide, account penetration among women rose from 47 percent in 2011 to 58 percent in 2014

Read the full blog post here.

Do Nepali businesses have more female managers compared to other countries?

Arvind Jain's picture

One of the primary goals of the Enterprise Surveys is to provide high quality data about the business environment based on establishments’ actual day-to-day experiences. This provides much needed information given how little is known about what businesses experience in developing economies. To raise awareness of the recently released Nepal 2013 Enterprise Survey, we provide a few highlights below. 
The Nepal 2013 Enterprise Survey consists of face-to-face interviews with 482 firms across the Central, Western, and Eastern regions in Nepal. Fieldwork was conducted between February and June 2013, with survey questions referencing the 2013 fiscal year. This post will focus on a couple of highlights. For the full survey highlights please see the Nepal 2013 Country Highlights document.

Does Institutional Finance Matter for Agriculture? Evidence Using Panel Data from Uganda

Shahid Khandker's picture

Smallholder agriculture in many developing countries has remained largely self-financed. However, improved productivity for attaining greater food security requires better access to institutional credit. Past efforts to extend institutional credit to smaller farmers has failed for several reasons, including subsidized operation of government-aided credit schemes. Thus, recent efforts to expand credit for smallholder agriculture that rely on innovative credit delivery schemes at market prices have received much policy interest. However, thus far the impacts of these efforts are not fully understood.

Finance and growth in China and India

Sergio Schmukler's picture

China and India are hard to ignore. Over the past 20 years they have risen as global economic powers, at a very fast pace. By 2012, China has become the second-largest world economy (based on nominal GDP) and India the tenth. Together, they account for about 36% of world population.

Financial Education during Schooling Years Improves Financial Behavior Later

LTD Editors's picture

The proliferation of new financial products and services continues to outpace the capacity of individuals and families to make informed financial choices. Financial education geared toward adults has shown low uptake, so the focus has shifted to introducing financial literacy during the schooling years. This research looks at a comprehensive financial education program spanning six states, 868 schools, and approximately 20,000 high school students in Brazil through a randomized control trial. The program increased student financial knowledge by a quarter of a standard deviation and led to a 1.4 percentage point increase in saving for purchases, better likelihood of financial planning, and greater participation in household financial decisions. “Trickle-up” impacts showed improvements in parental financial knowledge, savings, and spending behavior. The evidence suggests the program affected students’ preferences and attitudes about financial decisions well beyond the schooling years. Read the entire paper here.

Emerging market sovereign bonds: Does it cost more to issue a bond under the English law?

Dilip Ratha's picture

It seems it does. During 2008-2012, post-crisis, launching under English law increased spreads by more than a third on average. In other words, by choosing the UK law, a nation rated B+ (for example, Ecuador, Ghana, Greece, Pakistan and Zambia) apparently paid 7.7% interest rate per annum instead of 6 percent, and a nation rated BB (for example, Bangladesh, Nigeria, Serbia or Vietnam) paid nearly 5.7% instead of 4.5% (figure 1). Such an increase in spread is equivalent to a rating downgrade of 3 notches or more.

The Promise of Financial Inclusion

Mahmoud Mohieldin's picture

The following post first appeared on the Huffington Post.

Half the world's adults, approximately 2.5 billion individuals, do not have an account with a formal financial institution. Lack of access to finance is disproportionately skewed towards the poor, women, youth, and rural residents. Defined as the proportion of individuals and firms that use financial services, financial inclusion is increasingly seen as critical for ending extreme poverty and supporting inclusive and sustainable development. It provides people with the tools to invest in themselves by saving for retirement, investing in education, capitalizing on business opportunities, and confronting shocks (Global Financial Development Report, 2014). According to the World Bank Group's newly launched Global Financial Development Report 2014 on Financial Inclusion, most of the unbanked cite barriers such as cost, lack of documentation, distance, lack of trust, or religious reasons.