Innovative Experiences in Access to Finance: Market-Friendly Roles for the Visible Hand? (Latin American Development Forum) - Softcover

Torre, Augusto De La; Gozzi, Juan Carlos; Schumukler, Sergio L.

Softcover

ISBN 10: 0821370804 ISBN 13: 9780821370803

Publisher: World Bank Publications, 2017

Synopsis

Interest in access to finance and awareness of its importance have increased significantly since the early 2000s. Growing evidence suggests that lack of access to credit prevents many households and firms from financing high-return investment projects, which has an adverse effect on growth and poverty alleviation. Despite the increasing awareness of the importance of access to finance among both researchers and policymakers, there are still some major gaps in our understanding of the main drivers of access, as well as about the impact of different policies in this area. This book aims to fill some of these gaps by discussing recent innovative experiences in broadening access to credit in Latin America. These experiences are consistent with an emerging new view that, while recognizing the central role of the public sector in improving the contractual and informational environment for financial markets, also contends that there might be room for well-designed, restricted interventions in collaboration with the private sector to foster the development of financial markets and broaden access to them. In particular, the book analyzes, among other things, some interesting experiences from Brazil, Chile, Colombia, and Mexico that use different instruments to broaden access to credit in a sustainable way, such as structured finance, factoring, credit guarantees, and correspondent banking. Most of these experiences have led to financial innovation by developing new financial products and coordinating different players in the financial and real sectors to overcome barriers to access to credit. The book provides a first systematic analysis of these innovative experiences, including an analytical framework to understand problems of access to finance and a discussion of the effects and optimal design of public interventions. Finally, the book discusses some open policy questions about the role of the private and public sectors (including state‐owned banks) in broadening access to finance in a sustainable and market-friendly manner.

About this title

Synopsis

Interest in access to finance has increased significantly in recent years, as growing evidence suggests that lack of access to credit prevents lower-income households and small firms from financing high return investment projects, having an adverse effect on growth and poverty alleviation. This study describes some recent innovative experiences to broaden access to credit. These experiences are consistent with an emerging new view which recognizes a limited role for the public sector in financial markets, but contends that there might be room for well-designed, restricted interventions in collaboration with the private sector to foster financial development and broaden access. The book illustrates this view with several recent experiences in Latin America. Finally, it discusses some open policy questions about the role of the public and private sectors in driving these financial innovations.

Edition details

• Publisher: World Bank Publications
• Publication date: 2017
• ISBN 10: 0821370804
• ISBN 13: 9780821370803
• Binding: Paperback
• Language: English
• Number of pages: 256