DEPOSIT INSURANCE AND POVERTY REDUCTION

Social Indicators Research

Despite great developmental efforts in recent decades, Latin America still presents high levels of poverty and inequality when compared to developed nations. As explored widely in the literature, one potential instrument to diminish these issues is financial inclusion, including the access and usage of financial services by all people. Specifically, this paper verifies if financial inclusion and technology adoption decrease the poverty headcount ratio and the Gini index (i.e., inequality) of 13 Latin America countries (

SSRN Electronic Journal, 2000

World Bank Working Papers are published to communicate the results of the Bank's work to the development community with the least possible delay. The manuscript of this paper therefore has not been prepared in accordance with the procedures appropriate to formallyedited texts. Some sources cited in this paper may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply on the part of the World Bank any judgment of the legal status of any territory or the endorsement or acceptance of such boundaries.

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Financial inclusion is a complex issue, difficult to analyze because of the diverse perspectives that have to be taken into account to understand and measure it. Although there is no consensus on the definition of financial inclusion, there are three features that are usually considered: access, use, and quality of financial services. These features are closely related to the level of development of each country's overall financial system and any existing market gap.This information is critical to identify the advances and challenges of financial inclusion, as well as for the design of efficient and effective public policies. There are multiple sources of information of financial inclusion, often developed following different approaches.However, no single source allows a comparison using existing and somewhat abundant domestic data on the structure and level of coverage of financial services (credit, savings, micro-insurance and remittances), including those services mostly used...

International Journal of Finance & …, 2002

1 904143 00 8 Colin Kirkpatrick Maggie Curran, Marketing and Publicity Administrator Institute for Development Policy and Management, University of Manchester, Crawford House, Precinct Centre, Oxford Road, MANCHESTER M13 9GH Tel: +44-161 275 2804/2800 Fax: ...

I examine the relationship between financial inflows and poverty reduction in developing economies, focusing on Panama, Costa Rica and Honduras between 1981 and 2013. This research uses Foreign Direct Investments, net Official Development Aid (ODA), and personal remittances received as independent variables, and the poverty headcount and the GDP per capita as dependant variables. Our correlation analysis indicates a significant positive relationship between the level of FDI, growth and poverty reduction as well as between remittances and economic development. However, our findings suggests that no significant relationship can be drawn between the level of ODA and these indicators.

Journal of Economic and Financial Sciences, 2021

Poverty affects the majority of the world's population and denies the poor of meeting their basic needs, which includes financial services, education, healthcare and sanitation, amongst others (see eds. Kandachar & Halme 2017:10). Prahalad and Hart (2002) argued that serving the poor in a way that is responsive to their needs is an effective mechanism for poverty reduction. Formal Orientation: Access to and use of formal finance can be an epitome for poverty reduction in developing and transitional economies. Most of these economies experienced great growth in gross domestic product (GDP) compounded with exploding inequality, including racial wealth gaps, increasing starvation, exorbitant health and housing costs. Research purpose: The aim of this study was to examine the relationship between financial intermediation and poverty within the context of financial dimensions of financial access, financial efficiency and financial stability. Motivation for the study: Previous literature focuses mainly on the role of financial development in poverty reduction, with a dearth of literature on the other financial dimensions of financial access, financial efficiency and financial stability in reducing poverty. Research approach/design and method: A quantitative approach was used in this study through econometric analysis of the data. A panel data analysis was used for a panel of 35 developing countries, mainly in Africa. The panel heterogeneous estimation method of pooled mean group was employed in a panel autoregressive distributed lags setting for this article Main findings: Financial intermediation, including the other financial dimensions, reduces poverty. The effect of the financial dimensions depended on how poverty is measured. Practical/managerial implications: Policymakers and development agencies should take note of poverty measurement in addressing poverty challenges. Distorted understanding of poverty will result in distorted policies, which yield little or no results for the effective use of formal finance to reduce poverty. Contribution/value-add: Other financial dimensions of the formal financial sector can be considered for the use in poverty reduction strategies.

SSRN Electronic Journal, 2000

Series is a forum for stimulating discussion and eliciting feedback on ongoing and recently completed research and policy studies undertaken by the Asian Development Bank (ADB) staff, consultants, or resource persons. The series deals with key economic and development problems, particularly those facing the Asia and Pacific region; as well as conceptual, analytical, or methodological issues relating to project/program economic analysis, and statistical data and measurement. The series aims to enhance the knowledge on Asia's development and policy challenges; strengthen analytical rigor and quality of ADB's country partnership strategies, and its subregional and country operations; and improve the quality and availability of statistical data and development indicators for monitoring development effectiveness.

Journal of Development Studies, 2011

This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This article investigates how financial development helps to reduce poverty directly through the McKinnon conduit effect and indirectly through economic growth. The results obtained with data for a sample of developing countries from 1966 through 2000 suggest that the poor benefit from the ability of the banking system to facilitate transactions and provide savings opportunities but to some extent fail to reap the benefit from greater availability of credit. Moreover, financial development is accompanied by financial instability, which is detrimental to the poor. Nevertheless, the benefits of financial development for the poor outweigh the cost.

The World Bank Research Observer, 2007

ECLAC Books, 2018

This book was edited by Francisco G. Villarreal, Economic Affair Officer of the Economic Development Unit of the Economic Commission for Latin America and the Caribbean (ECLAC) subregional headquarters in Mexico. The following staff members of the ECLAC subregional headquarters in Mexico worked on the various chapters:

Economic Modelling, 2020

Understanding the channels through which financial inclusion affects poverty reduction remains a key policy issue in development debates. Considering that labour is the main asset of the poor, this paper investigates the effect of financial outreach on the number of workers living below the poverty line. It also analyses whether this effect may occur through increasing investment, remittances, private credit and the number of rich workers who can provide employment opportunities to the poorest. The study finds that improving financial outreach through additional bank branches reduces the number of poor workers, especially in developing countries hit by macroeconomic instability. In addition, this effect occurs mainly through credit expansion, while other channels substitute financial outreach in countries with a low level of financial development.

World Journal Of Advanced Research and Reviews, 2023

A stable financial system can build a country's economy. Financial inclusion is one of the strategies undertaken to improve the economy and alleviate poverty. Poverty is a troubling problem for every country. Both developing and developed countries face poverty. Therefore, poverty must be eradicated immediately. This study analyzes financial inclusion in poverty alleviation in five lower-middle-income countries (Indonesia, Myanmar, Laos, Pakistan, and Bangladesh). The variables used in this study are the number of credit accounts, the number of savings accounts, the number of debits, the number of bank branch offices, and economic growth. This research uses secondary data or time series from 2010-2020. The method used in this study is the ARDL Panel method. The panel shows that countries with leading indicators for poverty alleviation are Indonesia, Myanmar, and Pakistan. Meanwhile, the leading indicators variables are the number of creditors, the amount of savings, and the number of debits in the five lower-middle-income countries.

Well Being and Social Welfare, 2009

One of the central concerns in Latin America an the Caribbean (LAC) has been the reduction of poverty and inequality so prevalent in the continent. Using large world samples, the literature has found that financial development increases economic growth, increases the income of the poor, and reduces inequality. This paper studies the effects of financial development on the whole distribution of income in LAC. We find that the income of the poorest quintile has not been affected by expansion in the financial system. However, we do find that financial development has had a disproportionate positive effect on the incomes of the second, third and fourth quintiles. We also find some evidence for the Greenwood-Jovanovic (1991) hypothesis that this positive effect only begins after a country crosses a certain economic development threshold.

Policy Research Working Papers, 2006

This paper argues that the dominant policy paradigm on financial development is increasingly insufficient to address big emerging issues that are particularly relevant for financial systems in Latin America. This paradigm was shaped over the past decades by a fundamental shift in thinking towards market-based financial development and a complex process of financial crises interpretation. The result has been a richly textured policy paradigm focused on promoting financial stability and the convergence to international standards. We argue, however, that there is a growing dissonance between the current paradigm and the emerging issues, and this we illustrate by discussing challenges in three areas: stock markets, SME loans, and defined-contribution pension funds. We conclude that the dominant policy paradigm is ill-suited to provide significant guidance vis-à-vis the big emerging issues. We emphasize the need to take a fresh look at the evidence, improve the diagnoses, revisit expectations, and revise the paradigm. JEL classification codes: G15; G18; G20