Stephen Cecchetti, Kim Schoenholtz, 26 June 2018

Over the past six years, more than 1.2 billion adults have gained at least basic financial access through a financial institution or their mobile phone. This column discusses the benefits of financial inclusion, key trends regarding access since 2011, and the means for achieving the World Bank’s goal of universal financial access. It also argues that if the nations of Africa develop institutions to support strong, stable and balanced growth—including the necessary financial apparatus—they can become the primary drivers of global expansion in the remainder of the 21st century.

Timur Kuran, Jared Rubin, 28 April 2018

Poor people pay much more for credit than wealthier people because they are believed to be more likely to default, but this might not always be the case if the enforcement of repayment is biased in favour of wealthy people. This column uses evidence from Ottoman Istanbul to show that where courts favoured the rich and wealthy, these groups faced higher relative borrowing costs. Those with the greatest capacity to invest in capital and entrepreneurial activities thus paid the most for credit, possibly contributing to the slowdown of economic growth in the region.

Thorsten Beck, Maria Soledad Martinez Peria, Maurice Obstfeld, Andrea Presbitero, 12 April 2018

Research has shown that financial inclusion is closely linked to economic development and growth. However, more work is needed to establish the magnitude and channels of this effect and to pinpoint the types of financial services that have a stronger payoff without threatening financial stability. This column tackles these questions by presenting new evidence from a recent IMF-DFID conference on financial inclusion. It also suggests avenues for future research on the topic.

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