Understanding Barriers to Financial Access: Insights from Bank Pricing Data

IMF Working Papers, July 12, 2024

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Canonical URL: Understanding Barriers to Financial Access: Insights from Bank Pricing Data

Authors: Kazuko Shirono, Berhe Beyene, Fozan Fareed, Christiaan Loots, Andrea Quevedo, Kameshnee Naidoo
Published: July 12, 2024
Series: IMF Working Papers
DOI: https://doi.org/10.5089/9798400280627.001

Purpose: Analyze costs of financial access faced by low-income segments using a novel dataset on bank pricing (fees and charges for various banking services).
Data source: Collected as part of the United Nations Capital Development Fund’s (UNCDF) Making Access Possible (MAP) program using a market research approach.
Sample: 34 low- and middle-income countries in the ASEAN, SADC, and WAEMU regions.
Key headline result: Costs of maintaining a bank checking account and conducting a few basic transactions can exceed 5 percent of monthly income for consumers in more than 10 percent of the countries in the sample, mainly in the WAEMU and SADC regions.
Core conclusion: Affordability is a considerable barrier to access to financial services—particularly for low-income households and SMEs—and more granular data on affordability is needed for effective policymaking.

Sample size: 34 low- and middle-income countries.
Regions covered: ASEAN, SADC, and WAEMU.
Affordability threshold highlighted: costs can exceed 5 percent of monthly income.
Prevalence: this threshold is exceeded in more than 10 percent of the countries in the sample.
Main regional concentration of high costs: WAEMU and SADC regions.
Publication metadata:
- Pages: 36
- Volume: 2024
- Issue: 150
- Series: Working Paper No. 2024/150
- DOI: https://doi.org/10.5089/9798400280627.001
- Stock No: WPIEA2024150
- ISBN: 9798400280627
- ISSN: 1018-5941
- Publication date: July 12, 2024
- Authors: Kazuko Shirono, Berhe Beyene, Fozan Fareed, Christiaan Loots, Andrea Quevedo, Kameshnee Naidoo

Affordability dimension: The paper focuses specifically on the costs (fees and charges) associated with banking services as a key component of financial exclusion.
Distributional concern: High relative costs disproportionately affect low-income households and small and medium enterprises (SMEs).
Regional patterns: WAEMU and SADC show concentration of countries where basic banking costs can represent a large share of monthly income.

Data needs: Collect more granular data on affordability aspects of financial access to better inform policymaking.
Policy focus: Address affordability barriers to improve access for low-income households and SMEs; targeted interventions may be needed in WAEMU and SADC where costs are more likely to exceed 5 percent of monthly income.
Monitoring: Use enhanced bank pricing data to track and monitor the impact of policies aimed at reducing the cost burden of basic banking services.

Subjects: Economic sectors, Financial inclusion, Financial markets, Financial services, Income, Mobile banking, National accounts, Small and medium enterprises, Technology
Keywords: affordability, Africa, bank checking account, bank pricing, bank pricing datum, banking product, cost of banking services, Financial access, financial inclusion, Income, Mobile banking, Small and medium enterprises, small business bank products usage

IMF Working Papers: "Understanding Barriers to Financial Access: Insights from Bank Pricing Data", Working Paper No. 2024/150, July 12, 2024.