Banking Services for Everyone? Barriers to Bank Access and Use around the World

This paper presents new indicators of barriers to bank access and use of banking services around the world. It shows their significance for outreach and relates them to bank and country characteristics.The paper:

• Documents the extent of barriers to three banking services - deposits, loans and payments - across three dimensions - physical access, affordability, and eligibility;
• Discusses the importance of these barriers for access to and use of financial services;
• Explores which bank and country characteristics are associated with these barriers, with findings that have important implications for policies to broaden access.

It finds that:

• Barriers like high minimum deposit balances, minimum loan amounts and fees can lead to exclusion making these products unaffordable for large shares of the population;
• Strict documentation requirements and long processing times can exclude households and firms that cannot provide these documents or that depend on faster loan decisions;
• Geographic centralization of deposit and loan decisions at headquarters reduces physical access and increases the opportunity costs for households and firms to access financial services.