Financial inclusion, vulnerability, andmental models: From physical accessto effective use of financial servicesin a low income area of Mexico City

This paper addresses the issue of how to improve access to regulated financial services,hereafter referred to as financial inclusion. More widespread use of regulated financial servicescan enhance domestic resource mobilisation and improve allocative efficiency in the use ofcapital (World Bank 2007). However, the focus here is on financial inclusion as an instrument forpoverty reduction. This section considers why financial inclusion is of particular policy interestboth internationally and in Mexico. It then briefly reviews alternative theoretical approaches toanalysing financial inclusion and resulting welfare outcomes, particularly for relatively poor andvulnerable people.Section two presents a case study from a low income area of Mexico City. This illustrates howchoice of relevant theory for thinking about financial inclusion can be informed by empiricalresearch. We first use quantitative data to analyse the extent to which use of financial servicesvaries with education, employment, asset ownership and other indicators likely to affect personspecifictransaction costs. We then draw on complementary qualitative data to analyse otherinfluences on access to and use of financial services. Section three concludes that effective useof financial services is not only determined by individuals’ economic characteristics andexogenous transaction costs, but also by more complex cognitive and social processes. Thishighlights the dangers of relying too heavily on a narrowly economistic framework for analysis offinancial exclusion. More specifically, we argue for more research into how the diverse andchanging mental models of poor people influence their use and non-use of financial services

Financial access and exclusion in Kenya and Uganda

Policy emphasis has recently shifted to ‘Finance for All’ given evidence that financial sectordevelopment (FSD) contributes to growth but that the primary effects on poverty do not arisefrom pro-poor provision. This paper uses data from Financial Access Surveys carried out in 2006in Kenya and Uganda to investigate the socio-economic, demographic and geographical factorscausing access to and exclusion from formal, semi-formal and informal financial services. Itapproaches this from the perspective of institutional analysis. It finds, first, that socialinstitutions do present underlying barriers to access - more so than geography - and thatinformal provision is extensive. These findings suggest that institutional theories of FSD need toaddress the role of underlying social institutions and better understand the role of informalfinance, and that policy for effective outreach must similarly consider these dimensions

Financial access and exclusion in Kenya and Uganda

Policy emphasis has recently shifted to ‘Finance for All’ given evidence that financial sectordevelopment (FSD) contributes to growth but that the primary effects on poverty do not arisefrom pro-poor provision. This paper uses data from Financial Access Surveys carried out in 2006in Kenya and Uganda to investigate the socio-economic, demographic and geographical factorscausing access to and exclusion from formal, semi-formal and informal financial services. Itapproaches this from the perspective of institutional analysis. It finds, first, that socialinstitutions do present underlying barriers to access - more so than geography - and thatinformal provision is extensive. These findings suggest that institutional theories of FSD need toaddress the role of underlying social institutions and better understand the role of informalfinance, and that policy for effective outreach must similarly consider these dimensions

Improving air quality in metropolitan Mexico City : an economic valuation

Mexico City has for years experienced high levels of ozone and particulate air pollution. In 1995-99 the entire population of the Mexico City metropolitan area was exposed to annual average concentrations of fine particulate pollution (particulates with a diameter of less than 10micrometers, or PM10) exceeding 50 micrograms per cubic meter, the annual average standard in both Mexico and the United States. Two million people were exposed to annual average PM10 levels of more than 75 micrograms per cubic meter. The daily maximum one-hour ozone standard was exceeded at least 300 days a year. The Mexico Air Quality Management Team documents population-weighted exposures to ozone and PM10 between 1995 and 1999, project exposures in 2010, and computes the value of four scenarios for 2010: A 10 percent reduction in PM10 and ozone. A 20 percent reduction in PM10 and ozone. Achievement of ambient air quality standards across the metropolitan area. A 68 percent reduction in ozone and a 47 percent reduction in PM10 across the metropolitan area. The authors calculate the health benefits of reducing ozone and PM10 for each scenario using dose-response functions from the peer-reviewed literature. They value cases of morbidity and premature mortality avoided using three approaches: Cost of illness and forgone earnings only (low estimate). Cost of illness, forgone earnings, and willingness to pay for avoided morbidity (central case estimate). Cost of illness, forgone earnings, willingness to pay for avoided morbidity, and willingness to pay for avoided mortality (high estimate). The results suggest that the benefits of a 10 percent reduction in ozone and PM10 in 2010 are about $760 million (in 1999 U.S. dollars) annually in the central case. The benefits of a 20 percent reduction in ozone and PM10 are about$1.49 billion annually. In each case the benefits of reducing ozone amount to about 15 percent of the total benefits. By estimating the magnitude of the benefits from air pollution control, the authors provide motivation for examining specific policies that could achieve the air pollution reductions that they value. They also provide unit values for the benefits from reductions in ambient air pollution (for example, per microgram of PM10) that could be used as inputs into a full cost-benefit analysisof air pollution control strategies.Montreal Protocol,Public Health Promotion,Global Environment Facility,Air Quality&Clean Air,Health Monitoring&Evaluation,Montreal Protocol,Air Quality&Clean Air,Health Monitoring&Evaluation,Global Environment Facility,Transport and Environment

Towards a plural history of microfinance

The paper reviews different ways of telling the history of microfinance. We first contrast a mainstream and mostly positive narrative with a radical critique, illustrating differences with reference to India. We then argue for a more inductive and plural account, drawing on a set of doctoral research studies to illustrate variation in the evolution of microfinance experience according to social relations among users, organisational culture of suppliers, and the political economy of regulation. A global narrative of movement towards total financial inclusion - benign or otherwise - will not do justice to this diversity, nor should the history of microfinance be dominated by one overarching global perspective

Financial services in a low-income area of Mexico City : from physical access to effective use

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Financial inclusion, vulnerability and mental models: from physical access to effective use of financial services in a low-income area of Mexico City

Quantitative analysis indicates that variation in use of regulated and unregulated financial services in a low-income area of Mexico City can only partially be attributed to differences in socio-economic variables including gender, employment, education and housing status. Qualitative evidence suggests cognitive resources (including financial knowledge, attitudes and values) and socialised experiential learning are also important to financial inclusion and its relationship to vulnerability. Better understanding of these links requires more research into actual and potential users’ diverse and malleable mental models.L’analyse quantitative indique que la variation dans l’usage de services financiers régulés et non-régulés dans une zone à bas revenu de la ville de Mexico ne peut être que partiellement attribuée à des différences dans les variables socio-économiques comme le genre; emploi; éducation et statut immobilier. L’évidence quantitative suggère que des ressources cognitives (comme la connaissance en matière de finances et diverses attitudes et valeurs par rapport aux marchés financiers) ainsi que l’apprentissage expérientiel socialisé sont également des facteurs importants dans l’inclusion de groupes vulnérables dans les marchés financiers. Une meilleure compréhension de ces liens requiert une recherche plus approfondie des divers modèles mentaux actuels et potentiels des usagers et des facteurs qui les influencent

Financial Access and Exclusion in Kenya and Uganda

Policy emphasis has recently shifted to 'Finance for All' given evidence that financial sector development contributes to growth but effects on poverty do not arise from pro-poor provision. We argue that, given this policy goal, analyses of barriers to access must be country specific and go beyond the emphasis on transactions costs to incorporate the effects of social institutions since these contribute to discrimination. This paper uses data from Financial Access Surveys carried out in 2006 in Kenya and Uganda to investigate the socio-economic, demographic and geographical factors influencing access to and exclusion from formal, semi-formal and informal financial services.