Financial Inclusion, Growth and Inequality: A Model Application to Colombia

September 12, 2014

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Format: Chicago

Izabela Karpowicz. Financial Inclusion, Growth and Inequality: A Model Application to Colombia, (USA: International Monetary Fund, 2014) accessed September 26, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Financial inclusion has been one of the key pillars of Colombia’s development strategy for a number of years. Financial inclusion policies have aimed at channeling microcredit to poor, spreading formal banking system usage, fostering electronic payment acceptance, and making financial services more affordable. Using simulations from a general equilibrium model it is possible to identify the most binding financial sector frictions that preclude financial inclusion of enterprises, and study the effects on growth and inequality of efforts to remove these frictions. The study finds that lowering contraints on collateral promises higher growth while inequality is better tackled through measures that lower the financial participation cost.

Subject: Collateral, Credit, Economic sectors, Financial inclusion, Financial institutions, Financial markets, Financial sector, Financial services, Money

Keywords: Access to finance, Collateral, Cost, Credit, Excluded firm, Financial deepening, Financial inclusion, Financial sector, Firm, Firms leverage, Global, Inequality, Intermediation cost, Leveraged firm, Medium-size company, Participation cost, WP

Publication Details

Pages:

31
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2014/166
Stock No:

WPIEA2014166
ISBN:

9781498344838
ISSN:

1018-5941

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