What is the Impact of Access to Finance for Households?
By having access to financial services, poor households obtain reliable tools for managing their money. Since the incomes of poor households are unstable, their needs for reliable financial services are greater than those of richer households. By borrowing and saving, poor households can meet basic consumption needs such as having food on the table every day. Furthermore, they can save money for education and business opportunities or emergencies. Moreover, poor households also benefit from higher incomes and more and better employment opportunities as financial development reduces poverty through economic growth. In order to foster financial development, it is important to promote more efficient capital allocation. When 50 to 80 percent of the population around the globe lacks access to finance, it will be hard to achieve efficient allocation of capital without improving access to those large parts of the population. In this regard, the World Bank’s report, “Finance for All,” emphasiz
