Drivers of Financial Access: the Role of Macroprudential Policies

By Corinne C Delechat, Lama Kiyasseh, Margaux MacDonald, Rui Xu

May 29, 2020

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Corinne C Delechat, Lama Kiyasseh, Margaux MacDonald, and Rui Xu. Drivers of Financial Access: the Role of Macroprudential Policies, (USA: International Monetary Fund, 2020) accessed December 4, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This study analyzes the drivers of the use of formal vs. informal financial services in emerging and developing countries using the 2017 Global FINDEX data. In particular, we investigate whether individuals’ choice of financial services correlates with macro-financial and macro-structural policies and conditions, in addition to individual and country characteristics. We start our analysis on middle and low-income countries, and then zoom in on sub-Saharan Africa, currently the region that most relies on informal financial services, and which has the largest uptake of mobile banking. We find robust evidence of an association between macroprudential policies and individuals’ choice of financial access after controlling for personal and country-level characteristics. In particular, macroprudential policies aimed at controlling credit supply seem to be associated with greater resort to informal financial services compared with formal, bank-based access. This highlights the importance for central bankers and financial sector regulators to consider the potential spillovers of monetary policy and financial stability measures on financial inclusion.

Subject: Financial inclusion, Financial markets, Financial sector policy and analysis, Financial services, Macroprudential policy, Macroprudential policy instruments, Mobile banking, Technology

Keywords: Asset ratio, Financial inclusion, Financial service access, Formal financial services, Global, IMF staff, Informal financial services, Loan restriction, Low income, Macroprudential policy, Macroprudential policy instruments, Mobile banking, SSA population, SSA sample, Sub-Saharan Africa, WP

Publication Details

Pages:

41
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2020/074
Stock No:

WPIEA2020074
ISBN:

9781513545677
ISSN:

1018-5941

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