The Economic Impact of Banking the Unbanked [electronic resource] : Evidence From Mexico / Bruhn, Miriam

By: Bruhn, MiriamContributor(s): Bruhn, Miriam | Love, InessaMaterial type: TextTextPublication details: Washington, D.C., The World Bank, 2009Description: 1 online resource (30 p.)Subject(s): Access to Finance | Access to finance | Access to financial services | Bank loans | Banks and Banking Reform | Borrower | Business owners | Commercial banking | Documentation requirements | Economic activity | Economic growth | Entrepreneurial activity | Finance and Financial Sector Development | Financial services | Households | Income groups | Informal economy | Installment | International bank | Loan | Loan officers | Microfinance | Microfinance institutionsAdditional physical formats: Bruhn, Miriam.: The Economic Impact of Banking the Unbanked.Online resources: Click here to access online Abstract: This paper examines the effects of providing financial services to low-income individuals on entrepreneurial activity, employment, and income. The analysis exploits cross-time and cross-municipality variation in the opening of Banco Azteca in Mexico to measure these effects with a difference-in-difference strategy. Banco Azteca opened more than 800 branches simultaneously in 2002, focusing on low-income clients. The results show that the opening of Banco Azteca led to an increase in the number of informal business owners by 7.6 percent. Total employment also increased, by 1.4 percent, and average income went up by about 7 percent.
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This paper examines the effects of providing financial services to low-income individuals on entrepreneurial activity, employment, and income. The analysis exploits cross-time and cross-municipality variation in the opening of Banco Azteca in Mexico to measure these effects with a difference-in-difference strategy. Banco Azteca opened more than 800 branches simultaneously in 2002, focusing on low-income clients. The results show that the opening of Banco Azteca led to an increase in the number of informal business owners by 7.6 percent. Total employment also increased, by 1.4 percent, and average income went up by about 7 percent.

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