Publication: Mexico : Broadening Access to Financial Services Among the Urban Population, Mexico City's Unbanked, Volume 2, Annexes
Loading...
Published
2005-09
ISSN
Date
2012-06-18
Author(s)
Editor(s)
Abstract
The present report looks at issues of access to financial services in urban Mexico, drawing on existing documentation as well as on research (surveys, interviews and focus groups) carried out in Mexico City during 2002. The motivation behind this interest in financial exclusion is two fold. First, it is well documented that being "unbanked" (excluded from access to financial services) has costs; and it makes it more expensive to engage in a number of transactions (paying and being paid) and more difficult to save while maintaining the value of an asset As such, higher access to financial services is desirable from an efficiency point of view. Second, financial exclusion is an issue that primarily affects the poor. Access to financial services can help with poverty alleviation, particularly to the extent that it encourage asset buildings and help cope with shocks and overcome liquidity constraints. The report focuses on two key questions: what are the benefits the unbanked (those excluded from financial services) could gain from using formal financial sector institutions; and what discourages them from doing so. The objective is to help to identify measures to increase access to financial services in Mexico. As such the report is organized as follows. Chapter 1 sets the stage by discussing the importance of access to financial services and what other countries are doing to promote such access. Chapter 2 presents an analysis of actual and potential demand for financial services, and offers a profile of the unbanked residents of Mexico City. Chapter 3 then looks at the supply of financial services by the formal financial sector and possible explanations for Mexico's extremely low rate of financial access. Chapter 4 concludes and discusses possible means of improving financial participation.
Link to Data Set
Citation
“World Bank. 2005. Mexico : Broadening Access to Financial Services Among the Urban Population, Mexico City's Unbanked, Volume 2, Annexes. © World Bank. http://hdl.handle.net/10986/8359 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 Mexico : Broadening Access to Financial Services Among the Urban Population, Mexico City's Unbanked, Volume 1, Main Report(Washington, DC, 2005-09)The present report looks at issues of access to financial services in urban Mexico, drawing on existing documentation as well as on research (surveys, interviews and focus groups) carried out in Mexico City during 2002. The motivation behind this interest in financial exclusion is two fold. First, it is well documented that being "unbanked" (excluded from access to financial services) has costs; and it makes it more expensive to engage in a number of transactions (paying and being paid) and more difficult to save while maintaining the value of an asset As such, higher access to financial services is desirable from an efficiency point of view. Second, financial exclusion is an issue that primarily affects the poor. Access to financial services can help with poverty alleviation, particularly to the extent that it encourage asset buildings and help cope with shocks and overcome liquidity constraints. The report focuses on two key questions: what are the benefits the unbanked (those excluded from financial services) could gain from using formal financial sector institutions; and what discourages them from doing so. The objective is to help to identify measures to increase access to financial services in Mexico. As such the report is organized as follows. Chapter 1 sets the stage by discussing the importance of access to financial services and what other countries are doing to promote such access. Chapter 2 presents an analysis of actual and potential demand for financial services, and offers a profile of the unbanked residents of Mexico City. Chapter 3 then looks at the supply of financial services by the formal financial sector and possible explanations for Mexico's extremely low rate of financial access. Chapter 4 concludes and discusses possible means of improving financial participation.Publication Access to Financial Services in Colombia : The “Unbanked” in Bogotá(World Bank, Washington, DC, 2006-02)The authors look at the depth of the financial sector in Bogota in terms of the "financial exclusion" of those, particularly poorer citizens, who operate without accounts in formal financial institutions-the unbanked. They begin with a review of the overall decline in financial intermediation from 1998 to 2003, which explains, in part, the high percentage of unbanked-61 percent in a recent household survey in Bogota. The authors next look at the banking system today, concluding that the present challenge is to increase financial intermediation overall, especially with the poor. Their analysis shows that Colombia's banks provide costly services mainly catered toward high-income clients. Existing fees and costs of checking, savings, and loan services average 5-10 percent of a monthly minimum wage, making them hard to afford for low-income clients. The authors also explore the characteristics and impacts of financial exclusion associated with lower and more uncertain incomes, lower education, and closer links to the informal sector. They cite the household survey conducted in Bogota, showing that 70 percent of the unbanked earn less than one minimum wage per month, are three times more likely to be unemployed than the banked, and have lower education levels. The unbanked save and borrow largely in the informal sector, at greater risk and greater cost. At the same time, however, high home ownership rates show that the unbanked have the capacity to build assets, demonstrating that they have "bankable" characteristics. The authors conclude with recommendations for government and for the financial sector to broaden access for the benefit of public and private sectors, and for the unbanked.Publication The Urban Unbanked in Mexico and the United States(World Bank, Washington, DC, 2006-02)This paper examines the ways in which lower-income households obtain basic financial services in urban communities in Mexico and the United States. And it discusses the efforts that private sector and government organizations are making to lower the cost or improve the quality of those services. The paper summarizes available information on these issues and assesses the rationale and challenges facing the strategies that both countries are using to improve the financial services available to lower-income households, giving particular attention to "unbanked" households, meaning households that do not have deposit accounts with any regulated deposit-taking institution, and also to lower-income households in large urban areas. In comparing the experiences of the two countries, the paper reviews the extent to which lower-income households are unbanked, their use of non-bank financial services, and strategies for improving financial services to the unbanked. The underlying differences between the countries' typical household incomes-national income per capita in Mexico in 2002 was US$8,540, compared with $35,060 in the United States (World Bank 2003)-may also influence the difference in percentage of unbanked-9.1 percent of families in the United States compared with 76.4 percent found in a recent study in Mexico City.Publication Pursuing Efficiency While Maintaining Outreach : Bank Privatization in Tanzania(Washington, DC: World Bank, 2008-12)Profitability improvements after the privatization of a large state-owned bank might come at the expense of reduced access to financial services for some groups, especially the rural poor. The privatization of Tanzania's National Bank of Commerce provides a unique episode for studying this issue. The bank was split into the "new" National Bank of Commerce, a commercial bank that assumed most of the original bank's assets and liabilities, and the National Microfinance Bank, which assumed most of the branch network and the mandate to foster access to financial services. The new National Bank of Commerce's profitability and portfolio quality improved although credit growth was slow, in line with privatization experiences in other developing countries. Finding a buyer for the National Microfinance Bank proved very difficult, although after years under contract management by private banking consultants, Rabobank of the Netherlands emerged as a purchaser. Profitability has since improved and lending has slowly grown, while the share of non-performing loans remains low.Publication The Basic Analytics of Access to Financial Services(World Bank, Washington, DC, 2006-10)Access to financial services, or rather the lack thereof, is often indiscriminately decried as a problem in many developing countries. The authors argue that the "problem of access" should rather be analyzed by identifying different demand and supply constraints. They use the concept of an access possibilities frontier, drawn for a given set of state variables, to distinguish between cases where a financial system settles below the constrained optimum, cases where this constrained optimum is too low, and-in credit services-cases where the observed outcome is excessively high. They distinguish between payment and savings services and fixed intermediation costs, on the one hand, and lending services and different sources of credit risk, on the other hand. The authors include both supply and demand side frictions that can lead to lower access. The analysis helps identify bankable and banked population, the binding constraint to close the gap between the two, and policies to prudently expand the bankable population. This new conceptual framework can inform the debate on adequate policies to expand access to financial services and can serve as the basis for an informed measurement of access.
Users also downloaded
Showing related downloaded files
Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Global Economic Prospects, June 2024(Washington, DC: World Bank, 2024-06-11)After several years of negative shocks, global growth is expected to hold steady in 2024 and then edge up in the next couple of years, in part aided by cautious monetary policy easing as inflation gradually declines. However, economic prospects are envisaged to remain tepid, especially in the most vulnerable countries. Risks to the outlook, while more balanced, are still tilted to the downside, including the possibility of escalating geopolitical tensions, further trade fragmentation, and higher-for-longer interest rates. Natural disasters related to climate change could also hinder activity. Subdued growth prospects across many emerging market and developing economies and continued risks underscore the need for decisive policy action at the global and national levels. Global Economic Prospects is a World Bank Group Flagship Report that examines global economic developments and prospects, with a special focus on emerging market and developing economies, on a semiannual basis (in January and June). Each edition includes analytical pieces on topical policy challenges faced by these economies.Publication IFC Annual Report 2012 : Innovation, Influence, Demonstration, Volume 2. Results(Washington, DC: World Bank, 2012)This annual report of the International Finance Corporation (IFC) summarizes the innovation and leadership roles in the private sector during fiscal year 2012. The IFC invested a record $20.4 billion in 103 developing countries, reflecting a doubling of annual commitments over the last five years. Those investments included nearly $5 billion mobilized from other investors, and an investment for Sub-Saharan Africa totaling $2.7 billion, nearly twice as much as five years ago. The advisory services program expenditures grew to $197 million, up more than 50 percent over the last five years. Advisory services also helped 33 client governments introduce 56 investment-climate reforms that will improve access to basic services for more than 16 million people. IFC investment clients helped support 2.5 million jobs in 2011 and made 23 million loans totaling more than $200 billion to micro, small, and medium enterprises. Net income before grants to the International Development Association (IDA) totaled $1.66 billion. The IFC has invested more than $23 billion in IDA countries, nearly $6 billion of it in fiscal year 2012 alone.Publication Algeria Economic Update, Spring 2023(Washington, DC: World Bank, 2023-06-26)This Algeria Economic Update reports on the main recent economic developments and policies. It places them in a global and longer-term context and assesses the implications of these developments and policy changes for Algeria’s economic prospects. The report is intended for a broad audience, including policymakers, business leaders, financial market participants, and the community of analysts and professionals working in/on Algeria. The report is divided into two chapters. Chapter 1 presents macroeconomic developments in Algeria over the year 2022 and the first quarter of 2023, while Chapter 2 describes the short- and medium-term outlook for the Algerian economy.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.