Financial Inclusion: Zooming in on Latin America
IMF Working Papers, September 28, 2015
Source details
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- Financial Inclusion: Zooming in on Latin America
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Bibliographic details
- Authors: Era Dabla-Norris, Yixi Deng, Anna Ivanova, Izabela Karpowicz, Filiz D Unsal, Eva VanLeemput, Joyce Wong
- Published: September 28, 2015
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513568928.001
Summary
- Countries in Latin America and the Caribbean (LAC) have made important strides in promoting financial inclusion of firms and households.
- The region is broadly at par with its peers on financial inclusion of firms, while household inclusion lags behind.
- There is substantial heterogeneity across LAC countries.
- Reducing borrowing costs and strengthening further the regulatory environment, while taking steps to protect efficiency and stability of the financial system, could help close financial inclusion gaps.
- Reducing financial participation and monitoring costs and relaxing collateral constraints will help spur growth and reduce inequality, though trade-offs are likely, as illustrated in the case of Guatemala, El Salvador, and Peru.
Key findings
- LAC: notable progress in financial inclusion for firms and households, but household inclusion remains behind peer regions.
- Regional comparison: financial inclusion of firms in LAC is broadly on par with peers; household inclusion lags.
- Heterogeneity: substantial variation exists across individual LAC countries.
- Trade-offs: measures to increase inclusion (reduce participation and monitoring costs, relax collateral constraints) can promote growth and reduce inequality but involve trade-offs with efficiency and financial stability.
Policy recommendations
- Reduce borrowing costs to improve access to finance for firms and households.
- Strengthen the regulatory environment while protecting financial system efficiency and stability.
- Reduce financial participation costs and monitoring costs to expand inclusion.
- Relax collateral constraints to facilitate borrowing and investment, taking into account associated trade-offs.
Country illustrations
- The study highlights trade-offs and outcomes using the cases of Guatemala, El Salvador, and Peru.
Publication and metadata
- Title: Financial Inclusion: Zooming in on Latin America
- Authors: Era Dabla‑Norris, Yixi Deng, Anna Ivanova, Izabela Karpowicz, Filiz D Unsal, Eva VanLeemput, Joyce Wong
- Publication type: IMF Working Papers
- Date: September 28, 2015
- Pages: 35
- Volume: 2015
- Issue: 206
- Series: Working Paper No. 2015/206
- DOI: https://doi.org/10.5089/9781513568928.001
- Stock No: WPIEA2015206
- ISBN: 9781513568928
- ISSN: 1018-5941
Content based on the IMF Working Paper "Financial Inclusion: Zooming in on Latin America".