Paper
Developing Financial Institutions for the Poor and Reducing Barriers to Access for Women
Have financial services succeeded in reaching the poor, especially poor women?
66 pages
This paper reviews experiences with financial services programs for poor people, especially women. It summarizes lessons learned from experiences with largely ineffective formal, regulated credit initiatives.
The paper:
- Provides background on the types of lending programs designed to reach poor people;
- Discusses poor people's use of and access to savings facilities and credit;
- Analyzes the largely dismal experience with traditional, subsidized credit programs;
- Describes alternative approaches to expanding financial services to the poor, especially women;
- Identifies the main characteristics of successful, informal and quasiformal credit and savings programs.
It concludes that:
- Regulated and subsidized credit does not reach the poor or mobilize savings, and weakens financial sectors and institutions;
- Credit, by itself, without strong markets and infrastructure, cannot contribute to income generation;
- Reforming the financial sector will strengthen and expand economic opportunities but may not automatically give poor people, especially poor women, more access to financial services.
