Claessens, Stijn2013-12-202013-12-202006-08-02World Bank Research Observerdoi:10.1093/wbro/lkl004https://hdl.handle.net/10986/16428This article reviews the evidence on the importance of finance for economic well-being. It provides data on the use of basic financial services by households and firms across a sample of countries, assesses the desirability of universal access, and provides an overview of the macroeconomic, legal, and regulatory obstacles to access. Despite the benefits of finance, the data show that use of financial services is far from universal in many countries, especially developing countries. Universal access to financial services has not been a public policy objective in most countries and would likely be difficult to achieve. Countries can, however, facilitate access to financial services by strengthening institutional infrastructure, liberalizing markets and facilitating greater competition, and encouraging innovative use of know-how and technology. Government interventions to directly broaden access to finance, however, are costly and fraught with risks, among others the risk of missing the targeted groups. The article concludes with recommendations for global actions aimed at improving data on access and use and suggestions on areas of further analysis to identify constraints to broadening access.en-USCC BY-NC-ND 3.0 IGOABSENCE OF CREDITACCESS BARRIERSACCESS TO BANK ACCOUNTSACCESS TO CREDITACCESS TO FINANCEACCESS TO FINANCIAL SERVICESACCESS TO FINANCINGACCESS TO INTERNATIONAL MARKETSACCESS TO PAYMENTSACCOUNT OWNERSADMINISTRATIVE BURDENSADVANCED TECHNOLOGYAGRICULTURAL BANKBAD CREDITBANK ACCESSBANK ACCOUNTBANK BRANCHBANK SERVICESBANKING CRISESBANKING RELATIONSHIPBANKING SERVICESBANKING SYSTEMBANKING SYSTEMSBANKSBARRIERS TO GROWTHBARTERBENEFITS OF ACCESSBORROWERBORROWINGCAPITAL ADEQUACYCAPITAL MARKETSCAPITAL REQUIREMENTSCHAMBERS OF COMMERCECOLLATERALCOMMERCIAL BANKCOMMERCIAL BANKSCOMMUNITY REINVESTMENTCONSUMER CREDITCONSUMER FINANCECOOPERATIVESCREDIT ACCESSCREDIT ANALYSISCREDIT ASSOCIATIONSCREDIT BUREAUCREDIT BUREAUSCREDIT CONSTRAINTSCREDIT EXTENSIONCREDIT HISTORYCREDIT INFORMATIONCREDIT INFORMATION BUREAUSCREDIT LINESCREDIT REQUIREMENTSCREDIT SCORINGCREDIT UNIONCREDIT UNIONSCREDITWORTHINESSCROP INSURANCEDEBTDEPOSITDEPOSIT ACCOUNTSDEPOSITORSDEPOSITSDEVELOPMENT BANKDISCRIMINATIONE-BANKE-FINANCEECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIES OF SCALEELECTRONIC DEPOSITSELECTRONIC PAYMENTSELECTRONIC TRANSFERELECTRONIC TRANSFER ACCOUNTELECTRONIC TRANSFER ACCOUNTSELECTRONIC TRANSFERSEMPLOYERSENTERPRISE CREDITENTREPRENEURSEQUITY FINANCEEXCHANGE RATEEXCLUSIONEXPENDITURESEXTERNAL FINANCEEXTERNAL FINANCINGFACILITATIONFEDERAL BENEFITSFEDERAL RESERVEFINANCE COMPANIESFINANCESFINANCIAL DEPTHFINANCIAL DEVELOPMENTFINANCIAL EXCLUSIONFINANCIAL INSTITUTIONSFINANCIAL INTERMEDIARIESFINANCIAL INTERMEDIATIONFINANCIAL LITERACYFINANCIAL MARKETSFINANCIAL PRODUCTSFINANCIAL REFORMFINANCIAL SECTOR DEVELOPMENTFINANCIAL SERVICEFINANCIAL SERVICE PROVIDERSFINANCIAL SERVICES PROVIDERSFINANCIAL SYSTEMFINANCIAL SYSTEM DEVELOPMENTFINANCIAL SYSTEMSFINANCING OBSTACLESFIXED COSTSFORMAL BANKFORMAL FINANCIAL INSTITUTIONFORMAL FINANCIAL INSTITUTIONSFORMAL FINANCIAL SERVICEFORMAL FINANCIAL SERVICESFORMS OF CREDITGOVERNMENT INTERVENTIONGOVERNMENT INTERVENTIONSGREATER ACCESSGROWTH OPPORTUNITIESHIGH INTEREST RATESHOME OWNERSHIPHOUSEHOLDSHOUSING FINANCEILLITERACYINCOME GROUPSINDEBTEDNESSINEQUALITYINFORMAL FINANCEINFORMAL FINANCIAL INSTITUTIONINFORMATION ASYMMETRIESINFORMATION INFRASTRUCTUREINFORMATION SHARINGINFORMATION SYSTEMSINSTALLMENTSINSTITUTIONAL CAPACITYINSURANCE SERVICESINTEREST RATEINTEREST RATESINTERNATIONAL BANKINTERNATIONAL FINANCEINVESTMENT OPPORTUNITIESLACK OF ACCESSLENDERLENDERSLENDING REQUIREMENTSLITERACY REQUIREMENTSLOANLOAN APPLICATIONSLOANABLE FUNDSMICROFINANCEMICROFINANCE INSTITUTIONSMINIMUM BALANCESMONEYLENDERSMORAL HAZARDMULTINATIONALSMUTUAL FUNDSNET WORTHNONPROFIT ORGANIZATIONSOUTREACHOVERHEAD COSTSPAWNSHOPSPAYMENT SERVICESPAYMENTS SERVICESPOOR BORROWERSPOSTAL BANKPOSTAL BANKSPOSTAL SAVINGSPRIVATE CREDITPRIVATE SAVINGSPRIVATIZATIONPROFITABILITYPROFITABLE BANKINGPROPERTY RIGHTSPROVISION OF ACCESSPROXIMITY BANKSPUBLIC BANKSPUBLIC POLICYRATES OF RETURNREAL ESTATEREMITTANCESREPAYMENTREPAYMENT CAPACITYRETAIL BANKSRISK MITIGATIONSAVINGSSAVINGS ACCOUNTSAVINGS ACCOUNTSSAVINGS BANKSAVINGS BANK ACCOUNTSAVINGS BANKSSAVINGS PRODUCTSAVINGS SERVICESSECURITIESSMALL BANKSMALL BORROWERSSMALL BUSINESSSMALL BUSINESS ADMINISTRATIONSMALL BUSINESSESSMALL ENTERPRISESSMART CARDSSOCIAL COMMITMENTSOCIAL EXCLUSIONSOCIAL SECURITYSTART-UPSTART-UP COSTSSTOCK MARKETSTOCK MARKETSTRADE CREDITTRANSACTION COSTSUNIVERSAL ACCESSURBAN AREASUSURYUSURY LAWSVOLATILE INCOMEWORKING CAPITALJournal ArticleWorld Bank10.1596/16428