World Bank says expanded access to banking services comes with risks
Tuesday, November 12, 2013
WASHINGTON (Reuters) – In Brazil, bank customers can access their accounts aboard a floating bank on the Amazon River. In Mexico, rural residents find banking services inside popular stores like Walmart or 7-Eleven, or at their local pharmacy.
Mobile technology and regulatory reforms have made it easier and cheaper for private and public companies around the world to offer banking services to the poor, youth, women and rural residents, and others who lacked access.
But in a new report released on Monday, the World Bank warns that while some services, like low-fee accounts, clearly benefit the poor and small firms, others – such as microcredit, microinsurance, and debt relief – can do more harm than good.
“We’re very careful to make sure we’re not saying that everyone should be borrowing,” said Asli Demirguc-Kunt, the World Bank’s director of research and co-author of the report.