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Access to Formal Finance for the Unbanked in Developed Countries
Schreiner, M.
Publication Date: 1997
Published by: London, UK: Alternative Finance
www.alternative-finance.org.uk
Document Type: Web Publication
How to take formal financial services to the poor?
This paper, useful for all practitioners of microfinance, is based on the review of a forum held by the U.S. Comptroller of the Currency.
It discusses the difficulty of enabling the poorest ten per cent of the population to use financial services such as:
- Savings services;
- Check payment services;
- Money transfers.
The author contrasts these challenges with the challenges of the provision of micro-financial services in developing countries. The paper demonstrates that access to formal financial services is a problem for the poor even in the world's richest country, where in the absence of access to formal banks, the poor have to rely on:
- Check-cashing outlets (CCOs);
- Pawnshops;
- Rent-to-own stores.
The problem is all the more serious because so many services, including those designed to help the poor, are only available through formal financial institutions. It emphasizes the importance of savings and payment services, as opposed to loans.
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