Publication: El Salvador Financial Sector Assessment Program Update: Financial Inclusion
Loading...
Published
2010-11
ISSN
Date
2017-08-14
Author(s)
Editor(s)
Abstract
Financial service provision has expanded since the 2004 financial sector assessment program (FSAP) update, but access to financial services can expand greatly through mobile banking. An estimated 47 percent of adults in El Salvador have deposit accounts at a regulated financial institution, similar to the Latin American average. Although a range of range of bank and non-bank institutions serve the micro and Small and Medium Enterprises (SME) finance market, significant financial services provision is occurring outside of the regulatory perimeter. Improvements in credit information systems, simplification of credit documentation processes, and a strengthened legal framework for factoring can help facilitate SMEs access to credit. Issues of financial transparency and consumer protection are of increasing importance to the Salvadoran authorities, although resources for enforcement are limited. Both public and private entities are engaging in educational activities to promote financial literacy have the potential to play an important role in curbing over indebtedness. However, the consumer defense agency (Defensoria al Consumidor) lacks sufficient resources for enforcement of consumer protection laws. This paper is divided into following six parts: first part gives overview of financial access and usage patterns; the second part gives information on funding and savings products commercialized; the third part gives market participants; fourth part is legal and regulatory impediments to credit; fifth part deals with supervisory and regulatory perimeter issues; and sixth part is transparency, consumer protection, and financial literacy.
Link to Data Set
Citation
“World Bank; International Monetary Fund. 2010. El Salvador Financial Sector Assessment Program Update: Financial Inclusion. © World Bank. http://hdl.handle.net/10986/27768 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Toward Universal Access(International Finance Corporation, Washington, DC, 2011)This report highlights key trends, challenges, and opportunities for advancing financial inclusion and presents major high-level policy recommendations for consideration by the Group of 20 (G-20) policy makers to benefit a wider range of developing countries, including many non-G-20 countries. The report serves a broad audience, ranging from policy makers, development finance institutions, and the private sector to experts seeking a synopsis of the key subtopics relevant for financial inclusion and areas of work for advancing progress. The report is organized into four sections. The first recommends broad goals and agenda items to accelerate progress in financial inclusion. The second defines the financial inclusion concept and its importance for economic growth and poverty reduction. The third section provides a snapshot of each of the pillars presented as part of the recommendations, and the fourth section summarizes the way forward. The report also contains an annex that takes a closer look at the microfinance industry as a case in point for reviewing the successes, innovations, and lessons learned, which are critical for the broader discussion on financial inclusion.Publication Financial Inclusion in the Middle East and North Africa : Analysis and Roadmap Recommendations(2011-03-01)The paper provides an assessment of the state of financial inclusion in the MENA region, and identifies constraints, opportunities, and priorities for significantly improving access to finance. Practical recommendations for improving financial inclusion are outlined. Firstly, governments could agree a Financial Inclusion Strategy that is underpinned by improved data, that has both public and private sector commitment, and that scales up financial access on a large scale, principally through bank accounts. Secondly, the regulators should provide a legal and supervisory framework that enables access to finance to be expanded primarily through banks, but with regulatory space for the use of agents, mobile phone technology, and for a finance company model for microcredit and leasing. Interest rate caps on microloans should be removed, and instead consumer protection and supervisory capacity for microfinance should be strengthened, while prudent competition between financial service providers should be promoted. Thirdly, financial infrastructure needs to continue to be a focus area, and in particular credit information and secured transactions. Finally, barriers to the growth of Islamic financial services should be removed so that they can better meet market demand.Publication Mongolia Financial Sector Assessment(Washington, DC, 2012-06)Mongolia's economy has embarked on a very high, long-term growth trajectory. To realize fully its economic potential, Mongolia needs to build a diversified, efficient and stable financial system, capable of intermediating both on a large scale and in specific market segments. Access to financial services in Mongolia is relatively high when measured by the demographic penetration of branches. The aim of this technical note is to assess the level of access to finance in Mongolia, and especially for Micro, Small and Medium Enterprises (MSMEs), to identify key obstacles to improving access, and to provide recommendations to overcome these obstacles. The technical note is organized as follows. Section one provides a broad overview of the macroeconomic environment and is followed by section two on the status of access to finance in Mongolia. Section three discusses products and market segments. Section four examines the supply of financial services by analyzing the role of key market players. Section five examines the demand for financial services by drawing on enterprise surveys to assess firms perceptions of their access to finance, and analyzes financing conditions for MSMEs. Section six examines obstacles in the regulatory, supervisory framework, and financial infrastructure for access to finance. Section seven describes the main government programs related to access to finance. In conclusion, section eight provides policy recommendations for overcoming obstacles to enhancing access to finance.Publication South Africa Economic Update : Focus on Financial Inclusion(Washington, DC, 2013-05)Conditions in global financial markets have eased since mid-2012, reflecting improvements in fiscal sustainability and the establishment of mutual support mechanisms in the European Union (EU), even as the global economic recovery remains fragile and susceptible to downside risks. South Africa's growth slowed from 3.5 percent in 2011 to 2.5 percent in 2012, reflecting primarily the sluggish external environment and domestic labor strife. Growth declined in 8 of the 10 major subsectors. Researchers, policymakers, and other financial sector stakeholders are becoming more interested in the transformative power of financial inclusion. In South Africa, expanding access to financial services for individuals and small enterprises could reduce the country's persistent income inequality and stimulate growth. South Africa, as Africa's only G20 member and as one of the BRICS, plays an influential global role, and progress in financial inclusion could thus have an important demonstration effect. While formal financial institutions offer an array of financial services, this Update focuses on formal payments, savings, and credit. Financial inclusion is vital because of the role of financial services in helping individuals and firms withstand income shocks and smooth spending. A well-functioning financial system produces and processes information on investment opportunities and allocates capital based on these assessments; monitors individuals' and firms' performance after allocating capital; facilitates the trading, diversification, and management of risk; mobilizes and pools savings; and eases the exchange of goods, services, and financial instruments.Publication Jamaica(Washington, DC, 2015-04-01)Jamaica has experienced 30 years of low economic growth and high fiscal deficits, with a significant impact on the development of the financial sector. As part of the overall growth and competitiveness reform agenda, the authorities have embarked on ambitious financial sector legislation reforms to address weaknesses. Lack of access to credit and equity constrain Micro, Small and Medium Sized Enterprise (MSME) operations and growth, and ultimately their contribution to the economy. High interest rates and low penetration of credit to households and MSMEs can be explained by high credit risk as a result of high information asymmetries in the market, as well as limited competition in the banking sector. The authorities should complete the establishment of a regulatory and supervisory framework for deposit-taking institutions proportionate to the risks and the activities they undertake. The impact of public policies has been limited and programs on housing, MSME finance, and agriculture finance would be welcomed to address market gaps, in support of financial inclusion. The financial inclusion agenda also requires a comprehensive strategy on consumer protection regulation and supervision.
Users also downloaded
Showing related downloaded files
Publication Regional Poverty and Inequality Update: Latin America and the Caribbean, October 2025(Washington, DC: World Bank, 2025-10-23)This brief summarizes recent facts related to poverty and inequality in Latin America and the Caribbean (LAC) using the latest wave of harmonized household surveys from the Socio-Economic Database for LAC (SEDLAC). This brief was produced by the Poverty Global Practice in the LAC Region of the World Bank.Publication An Overview of Agricultural Pollution in Vietnam(World Bank, Washington, DC, 2017)Aquaculture is an important and growing part of Vietnam’s agricultural economy. The aquaculture industry’s expansion has, however, contributed to environmental degradation and become a potential threat to the industry’s sustainability. Aquaculture expansion has involved the conversion of large areas, including mangroves, to farms and ponds, leading to changes in ecosystems and land use. In addition, aquaculture practices generate an array of emissions, most of them carried in wastewater and solid waste. This report is meant to provide a broad national overview of pollution problems in the aquaculture subsector. It aims to describe the nature, magnitude, and drivers of aquaculture pollution problems, taking stock of the state of evidence on this topic. It also touches upon current responses to the problem and offers a number of directions for policymakers.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Growth in the Middle East and North Africa(Washington, DC: World Bank, 2024-10-16)This issue of the MENA Economic Update presents a summary of recent macroeconomic trends, including an update of the conflict centered in Gaza and its regional spillovers, alongside an analysis of factors that shape the long-term growth potential of the region, with special attention to the persistent effects of conflicts. A modest uptick in growth is forecast for 2024, which nonetheless masks important disparities within the region. The acceleration is driven by the high-income oil exporters, while growth is expected to decelerate among developing MENA countries, both developing oil exporters and developing oil importers. Despite current challenges, the region can dramatically boost growth by better allocating talent in the labor market, leveraging its strategic location, and promoting innovation. Closing the gender employment gap, rethinking the footprint of the public sector, and facilitating technology transfers through trade under enhanced data quality and transparency can help the region leap toward the frontier. Peace is a pre-condition for catching up to the frontier, as conflict can undo decades of progress, delaying economic development by generations.Publication Deliberative Democracy in India(World Bank, Washington, DC, 2017-03)This paper traces the evolution of deliberative institutions in India to understand the role of deliberation in democratic life, as well as the ways in which deliberative bodies influence, and are influenced by, entrenched social inequality. The paper first unpacks the historical roots of Indian deliberation in the pre-colonial and colonial periods, emphasizing the ways in which religious traditions fostered a culture of debate and dialogue. The paper then explores the interplay between Western liberal philosophers, most notably Henry Maine, and Indian political thinkers, including Gandhi and Ambedkar, on participatory democracy in India. The discussion then highlights the continued dialogue between Indian and Western ideas in the push for greater participatory development. Finally, the paper probes the current incarnation of state-sponsored deliberation in India -- namely, village assemblies known as gram sabhas under the constitutionally mandated system of Indian village democracy or Panchayati Raj -- and reviews the growing empirical scholarship about these village assemblies.