{
  "title": "The More the Merrier? What Happens When More People Use Financial Services",
  "publication": "IMF Blog, September 15, 2015",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2015/09/15/the-more-the-merrier-what-happens-when-more-people-use-financial-services",
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  "summary": "Publication: The More the Merrier? What Happens When More People Use Financial Services",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Publication: The More the Merrier? What Happens When More People Use Financial Services\n- Authors: Ratna Sahay, Martin Cihak, Papa N’Diaye, Adolfo Barajas, Srobona Mitra\n- Date: September 15, 2015\n- Core message: Financial inclusion delivers tangible macroeconomic benefits up to a point, but broadening access to credit requires high quality banking supervision to avoid compromising financial stability."
    },
    {
      "heading": "Tangible benefits from inclusion",
      "content": "- Greater access to financial services is associated with higher GDP growth.\n- Financial inclusion provides an additional growth boost beyond that from increasing financial depth.\n- The benefits of inclusion diminish as both financial access and financial depth become large."
    },
    {
      "heading": "Mind the gap (coverage and usage)",
      "content": "- More than 60 countries have adopted national financial inclusion targets and strategies.\n- The percentage of adults with bank accounts increased from 50 to about 60 percent worldwide between 2011 and 2014.\n- Some two billion adults remain “unbanked”.\n- Out of the banked population, almost 40 percent do not effectively use their accounts.\n- Regional and sectoral disparities:\n  - Organization for Economic Cooperation and Development countries: banked population over 90 percent.\n  - Developing countries: banked population 54 percent.\n  - Inclusion is particularly low in South Asia and the Middle East.\n- Gender and firm-size gaps:\n  - Worldwide, men are five percent more likely to own accounts than women.\n  - In developing countries, men are nine percent more likely to own accounts than women.\n  - Small firms are about ten percentage points more likely to feel credit-constrained than large firms.\n- Leadership and supervision gender gaps:\n  - Women hold less than 20 percent of bank board seats.\n  - Women represent less than two percent of bank CEOs.\n  - Share of women in banking supervisory boards is about 17 percent on average."
    },
    {
      "heading": "Impacts on growth, stability, and inequality",
      "content": "- Growth:\n  - Various types of access—accounts, credit, infrastructure, women users, low-income—improve economic growth, but up to a point.\n  - The growth benefits from inclusion are additional to those from financial depth.\n  - The benefits fall as both financial access and depth become large.\n- Stability:\n  - Effects of broadening access to credit on financial stability depend on the quality of financial supervision.\n  - When supervision quality is high (assessed by Basel Core Principles via IMF-World Bank Financial Sector Assessment Programs), broadening credit access leads to an increase in financial stability as banks build up capital and profit buffers.\n  - When supervision quality is low, these buffers decline as credit access broadens, compromising stability.\n  - Supervisory quality tends to be deficient in countries where financial inclusion is most lacking, creating a dual challenge.\n  - Other forms of financial inclusion (access to bank accounts, branches, and ATMs) do not significantly deteriorate financial stability and can be expanded without impeding stability.\n- Inequality:\n  - Gaps in financial inclusion are associated with economic inequality, but the association appears relatively weak."
    },
    {
      "heading": "Policy implications and recommended priorities",
      "content": "- Expand access to bank accounts, branches, and ATMs to increase inclusion without materially harming financial stability.\n- Prioritize strengthening banking supervision before or alongside broadening access to credit:\n  - High quality supervision helps ensure that expanded credit access builds capital and profit buffers rather than eroding them.\n- Address gender gaps across users, bank leadership, and supervisory roles to improve inclusion and governance.\n- Recognize limits to what financial inclusion can achieve; benefits diminish as access and depth grow large, so tailor policy ambitions accordingly.\n\nThe More the Merrier? What Happens When More People Use Financial Services — Ratna Sahay, Martin Cihak, Papa N’Diaye, Adolfo Barajas, Srobona Mitra; September 15, 2015; https://www.imf.org/en/blogs/articles/2015/09/15/the-more-the-merrier-what-happens-when-more-people-use-financial-services\n\n---\n\n Content in this bundle\n\n- Staff Discussion Note\n  - Staff Discussion Note (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Staff Discussion Note (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- عربي\n- financial inclusion\n- growth and stability\n- too much finance\"\n- Financial Access Survey\n\nSource: https://www.imf.org/en/blogs/articles/2015/09/15/the-more-the-merrier-what-happens-when-more-people-use-financial-services"
    }
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    "Authors: Ratna Sahay, Martin Cihak, Papa NDiaye, Adolfo Barajas, Srobona Mitra",
    "Published: September 15, 2015",
    "Publication: The More the Merrier? What Happens When More People Use Financial Services",
    "Authors: Ratna Sahay, Martin Cihak, Papa N’Diaye, Adolfo Barajas, Srobona Mitra",
    "Date: September 15, 2015",
    "Core message: Financial inclusion delivers tangible macroeconomic benefits up to a point, but broadening access to credit requires high quality banking supervision to avoid compromising financial stability.",
    "Greater access to financial services is associated with higher GDP growth.",
    "Financial inclusion provides an additional growth boost beyond that from increasing financial depth.",
    "The benefits of inclusion diminish as both financial access and financial depth become large.",
    "More than 60 countries have adopted national financial inclusion targets and strategies.",
    "The percentage of adults with bank accounts increased from 50 to about 60 percent worldwide between 2011 and 2014.",
    "Some two billion adults remain “unbanked”.",
    "Out of the banked population, almost 40 percent do not effectively use their accounts.",
    "Regional and sectoral disparities:",
    "Gender and firm-size gaps:",
    "Leadership and supervision gender gaps:",
    "Growth:",
    "Stability:",
    "Inequality:",
    "Expand access to bank accounts, branches, and ATMs to increase inclusion without materially harming financial stability.",
    "Prioritize strengthening banking supervision before or alongside broadening access to credit:",
    "Address gender gaps across users, bank leadership, and supervisory roles to improve inclusion and governance.",
    "Recognize limits to what financial inclusion can achieve; benefits diminish as access and depth grow large, so tailor policy ambitions accordingly.",
    "**Staff Discussion Note**",
    "[عربي](http://blog-montada.imf.org/?p=3722)",
    "[financial inclusion](http://www.imf.org/external/POS_Meetings/SeminarDetails.aspx?SeminarId=68)",
    "[growth and stability](http://blogs.imf.org/2015/05/04/how-much-finance-is-too-much-stability-growth-emerging-markets/)",
    "[too much finance\"](http://www.imf.org/external/pubs/cat/longres.aspx?sk=42868)",
    "[Financial Access Survey](http://fas.imf.org/Default.aspx)"
  ],
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