Corporate Governance and Access to Finance

This paper examines whether corporate governance among World Savings Banks Institute (WSBI) members contributes to their access to finance goals.

Access to finance is an important objective for WSBI members, in the context of their double bottom line banking approach. WSBI members also follow corporate governance standards set by international bodies or national regulators. The study considers country and institutional dimensions for access to finance and corporate governance to estimate the statistical connection between the two variables. Results suggest that:

• Corporate governance and access to finance are linked at the country and institution levels;
• Financial outreach tends to be higher when the country has a good corporate governance framework and WSBI members have a higher market share in the country;
• Quality of corporate governance correlates to access to finance indicators in developing countries;
• Corporate governance components that are under the control of institutions have more influence on promoting access to finance than country components;
• WSBI members have many common corporate governance characteristics.

The study recommends that WSBI corporate governance mechanisms must reflect a balance between the objectives of access to finance and sustainability.