New Frontiers in Banking Services Book

Preface     V
List of Contributions     VII
Introduction     1
Part I
Access to Bank Accounts and Payment Services     5
Introduction: Financial Exclusion     5
Interests, Concerns and Possible Solutions     11
General Trends     11
Underbanked Individuals and Fringe Banks     15
Over-Indebtedness     16
Financial Literacy     21
The Service of General Interest Mission and the Community-Based Approach     22
Concerns and Possible Solutions     29
The Issue of Measurement and Comparative Analysis     30
Types of Response     35
Case Studies     43
Europe     43
The Situation Overseas     69
Result from a Survey in France, Italy and Spain     84
Conclusions and Future Perspectives     95
References     99
Access to Credit: the Difficulties of Households     107
Introduction     107
The Use of Credit by Households     108
The Questionnaire Survey     112
A Theoretical Framework for Credit Exclusion     117
The Role of Credit to Overcome Social Exclusion     117
EconomicRationales for Credit Exclusion     118
Beating Credit Exclusion     123
Lending to Households: a Profitable Business Area     124
Reducing the Costs and Risks Associated with Households Loans     128
A Wider Scope for Not-For-Profit Intermediaries and Organizations     132
Conclusions and Policy Implications     134
References     137
Access to Investments and Asset Building for Low Income People     141
Saving and Asset Accumulation for LMIs: Theoretic Framework     141
The USA Experience with the Individual Development Accounts (IDAs)     145
Features of the IDA Accounts/Programs     145
Stakeholders of the IDA Accounts/Programs     154
Funding of the IDA Accounts/Programs     159
Saving and Asset Accumulation with Tax Refunds     162
The British Experience with the Child Trust Fund and the Savings Gateway     165
Conclusions     172
References and Bibliography     173
Appendix - Comment on Data About the "Access to Investment Services"     178
Appendix to Part I - Methodological Notes to the Field Research in France, Italy and Spain     183
Part II
What Are the Specific Economic Gains from Improved Financial Inclusion? A Tentative Methodology for Estimating These Gains     191
Introduction     191
Defining Financial Exclusion     192
European Evidence on Exclusion     193
Market Context and European Policy Responses     195
From Exclusion to Inclusion - Identifying the Costs and Benefits     199
Measuring the Economic Gains from Improved Financial Inclusion     207
Conclusion     209
References and Bibliography     210
From Financial Exclusion to Overindebtedness: the Paradox of Difficulties for People on Low Incomes?     213
Introduction     213
A Definition of Financial Exclusion as a Social Phenomenon     215
Return to the Definitions of Financial Exclusion     215
Use Difficulties     217
Financial Exclusion and Social Exclusion: Moving Towards an Overall Definition     219
Access and Use of Credit: the Importance of Social Constraints     221
The Financialisation of Social Relations     222
Use of Credit as a Forced Response to Life Risks     224
The Mechanisms Underlying Access and Use Difficulties     227
The Reasons for the Banking Relationship     228
The Need for Suitable Advice to Customers on Limited Incomes     231
Banking Imperatives Versus Customisation of the Service     233
Standardisation of the Service that Is the Source of Access and Use Difficulties, and Therefore of Overindebtedness     236
Conclusion     241
References     243
The Role of German Savings Banks in Preventing Financial Exclusion     247
Introduction     247
Savings Banks as a Part of the German Banking System     249
The Three-Pillar Structure of the German Banking System     249
Key Facts of the Sparkassen-Finanzgruppe     251
Relationships Between Municipalities and the Sparkassen-Finanzgruppe     252
Recent Developments Affecting the Sparkassen-Finanzgruppe     253
Is the Public Mandate of the Savings Banks Obsolete or a Successful Strategy to Prevent Financial Exclusion?     254
Stipulations of the Public Mandate of German Savings Banks     254
Provision of Basic Banking Services     256
Nationwide Provision of Financial Services     257
Financing of Small and Medium-Sized Enterprises     259
Encouraging the Accumulation of Wealth and Financial Education     261
Future Outlook on the Sparkassen-Finanzgruppe     262
References     265
Economic Growth and Financial Inclusion: the Case of Poland     271
Introduction      271
Transformation of the Polish Banking Sector and Provision of Banking Services     273
Provision of Banking Services to Households and Corporations     282
Models of Bank Services to SME     287
Barriers to Providing Banking Services to SME: Results of Bank Surveys     290
Conclusions     294
References     297
Italian Banks' Credit Approach Towards Low-Income Consumers and Microenterprises: Is There a Bias Against Some Segments of Customers?     299
Introduction     299
Methodologies of Credit Risk Measurement: Credit Scoring Models     302
The Choice of Highly Explanatory Variables     305
Strengths and Weaknesses of Credit Scoring     307
The Effects of the Adoption of Credit Scoring on a Marginal Borrower's Credit Process     310
The Experiences of Some Italian Banks     313
Conclusions     318
References     319
Banking the Poor: Policies to Bring Low- and Moderate-Income Households in the United States into the Financial Mainstream     323
The "Unbanked" and the "Underbanked"     323
The Alternative Financial Sector     324
The Costs of Being Unbanked     326
The Banking Sector     327
Barriers to Banking the Poor      327
Governmental Policy and Private Sector Innovation     329
Payments Systems and Distribution Networks     333
Checks and Debit Cards     333
ATMs     335
Direct Deposit and Bill Payment     337
Transforming Financial Services for the Poor     339
A New First Accounts Tax Credit     339
The Community Reinvestment Act     344
State Policies and Welfare Reform     345
Financial Education     345
Reforming the Alternative Financial Sector     346
Conclusion     349
References     350
Migrants and Remittances     353
Migration Phenomena: Modern-Day Elements of an Ancient Phenomenon     353
The Risk of Financial Exclusion Within a Broader Perspective     355
Migration Phases and Personal Variables as Key Elements of Financial Needs     356
Demand for Financial Services Aimed at Immigrants     357
Migrant Remittance Behaviour     365
Conclusions     368
References     370
Conclusions     373
Editors and Contributing Authors     377