Washington, September 14, 2009─A
new report from IFC and the World Bank shows by focusing on building and
reforming credit reporting, collateral registries, and payment and
securities systems, more than half the population in emerging markets could
have access to financial services within 10 years and enjoy financial transaction
cost reductions of nearly 80 percent.
The report, Financial Infrastructure:
Building Access through Transparent and Stable Financial Systems, maps
financial intermediation systems and the size of the financial systems
market. It provides an expanded data index for measuring financial
infrastructure and identifies reforms.
Financial institutions process payments,
check potential borrowers’ past experiences with credit, and evaluate
the suitability of proposed loan collateral. Consumers pay bills,
buy houses, remit earnings, and save for retirement. All of these formal
financial transactions rely on a foundation of institutions, information,
technologies, and rules and standards—the infrastructure of financial
intermediation.
These systems are analyzed in the report,
drawing on efforts of the World Bank Group in payment and securities settlement
systems, remittances, credit reporting, and secured transactions and collateral
registries. The report makes recommendations for reform to make the
system more efficient and reliable, thereby reducing costs and increasing
access to financial services.
These underlying systems of financial
infrastructure touch at least every fifth person in emerging markets. Today,
credit bureaus cover 390 million people, remittances over 700 million,
and payment systems one billion people. In financial terms, bureaus support
nearly $800 billion worth of credit and the value of remittances reached
$328 billion in 2008.
“Properly functioning financial infrastructure
is critical for efficient and increased access to financial services,”
said Peer Stein, IFC Manager for Access to Finance Advisory Services. “And
this report shows not only where we could be in terms of access to finance,
but it provides a roadmap for achieving these gains at a global, country,
and institutional level.”
The report is available online at http://www.worldbank.org/financialinfrastructure.
About the World Bank Group
The World Bank Group is one of the world’s
largest sources of funding and knowledge for developing countries. It comprises
five closely associated institutions: the International Bank for Reconstruction
and Development (IBRD) and the International Development Association (IDA),
the International Finance Corporation (IFC); the Multilateral Investment
Guarantee Agency (MIGA); and the International Centre for Settlement of
Investment Disputes (ICSID). Each institution plays a distinct role in
the mission to fight poverty and improve living standards for people in
the developing world. For more information, please visit www.worldbank.org,
www.miga.org,
and www.ifc.org.
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