World Bank Report: Financial Infrastructure: Building Access Through Transparent and Stable Financial Systems

According to the International Finance Corporation (IFC) World Bank's new report shows that emerging markets have vast potential for financial services...



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 per cent, said an IFC statement

More from the IFC Website:



"Financial institutions process payments, check a potential borrower’s past experiences with credit and evaluate the suitability of a security interested to be used for a loan. Consumers pay bills, buy houses, and save for retirement – all of these formal financial transactions rely on a foundation of institutions, information, technologies, and rules and standards which enable financial intermediation.



These underlying systems of financial infrastructure are analyzed in a new report "Financial Infrastructure: Building Access Through Transparent and Stable Financial Systems" drawing on efforts of the World Bank Group in payment and securities settlement systems, remittances, credit reporting, and secured transactions and collateral registries, with recommendations for reform to make the system more efficient and reliable reducing costs and increasing access to financial services."  (Figure 3 from their report)

• Financial infrastructure touches at least every 5th person in emerging markets. Today, credit bureaus cover 390 million people, remittances over 700 million and payment systems 1 billion. In financial terms, bureaus support nearly $800 billion worth of credit and the value of remittances reached $328 billion in 2008.
  
  
  
  


• Efficient financial infrastructure allows for cost reductions of up to 75% or more in transactions costs for credit evaluations, collaterizing loans, remittances and payments.
  
  
  
  


• Improvements in financial infrastructure have the potential to enable access to financial services for half the population in emerging markets in the next 10 years.