Financial Channels, Property Rights, and Poverty

Studies on the link between financial development and poverty have been inconclusive. Some claim that deeper financial sectors should improve the allocation of capital by allowing entrepreneurs greater access to finance, which should particularly favor the poor. Others argue that improvements in the financial system primarily benefit the rich and politically connected. The literature has also been ambiguous about the channels through which finance may be associated with lower poverty (deposits versus credit). Looking at a sample of 37 countries in Sub-Saharan Africa from 1992 through 2006, the paper suggests that financial deepening is associated with lower poverty through different channels depending on the strength of property rights. In the absence of well-defined and enforced property rights, wider access to saving and risk-sharing instruments is accompanied by a reduction in poverty. Only once property rights grow stronger is credit associated with lower poverty.

Bibliographic Details

Main Authors:	Singh, Raju Jan, Huang, Yifei
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2016-02
Subjects:	CREDIT MARKETS, DEPOSIT, FINANCIAL SERVICES, ECONOMIC GROWTH, DEPOSITS, BROAD MONEY, LEGAL ENVIRONMENT, DEFAULTS, DEBTORS, INTEREST, INTEREST RATE, PROPERTY RIGHTS, PRIVATE CREDIT, EXCHANGE, BANKING SYSTEM, POOL OF BORROWERS, LIQUIDITY, DEVELOPING COUNTRIES, ENTREPRENEURS, POLITICAL ECONOMY, DEPOSIT MONEY BANKS, ACCESS TO SAVING, LOAN, DURABLE ASSETS, BORROWERS, PRIVATE PROPERTY, PROBABILITY OF REPAYMENT, DUMMY VARIABLE, SAVING, CENTRAL BANKS, CREDITORS, INFLATION, INTERNATIONAL BANK, CREDITOR, INSTRUMENTS, INTEREST RATES ON LOANS, LEGAL SYSTEMS, ALLOCATION OF CAPITAL, FINANCIAL INSTITUTION, COMMERCIAL BANK, CONTRACT ENFORCEMENT, RISK DIVERSIFICATION, BANK ASSETS, CONTRACTS, INCOME INEQUALITY, INTEREST RATES, MONETARY FUND, FINANCIAL INSTITUTIONS, MARKETS, MORAL SUASION, RETURN, INFLATION RATE, CREDITOR RIGHTS, COMMERCIAL BANK ASSETS, LENDERS, LOANS, RISK SHARING, INFORMATION ON BORROWERS, BANK CREDIT, GROSS DOMESTIC PRODUCT, RULE OF LAW, FINANCIAL SYSTEM, FINANCE, BANK POLICY, INFORMATION ASYMMETRY, TRANSACTIONS, MACROECONOMIC ENVIRONMENT, INVESTORS, HUMAN CAPITAL, PROPERTY RIGHT, CREDIT CONSTRAINTS, GOOD, CAPITAL, INTERNATIONAL FINANCIAL STATISTICS, TRANSPARENCY, FINANCIAL STABILITY, LACK OF ACCESS, LLC, FUTURE, ACCESS TO FINANCE, BANK, CREDIT, INCOME VARIABILITY, MARKET CONSTRAINTS, CONTRACT, PRICE STABILITY, REPAYMENT, PROPERTY, AMOUNT OF CREDIT, INCOME INEQUALITIES, FLOW OF CREDIT, BALANCE SHEET, MARKET, DEFAULT, FIXED EFFECT MODELS, TRADE LIBERALIZATION, EXPROPRIATION, ECONOMIC DEVELOPMENT, ECONOMIC OPPORTUNITIES, FINANCIAL DEVELOPMENT, DURABLE, INVESTMENT, EXTREME POVERTY, LEGAL PROTECTION, DOMESTIC CREDIT, COMMERCIAL BANKS, SHARE, CREDIT RATIONING, HOUSEHOLDS, COLLATERAL, POVERTY, RIGHTS OF CREDITORS, FINANCIAL MARKETS, EARNINGS, PROFIT, LEGAL RIGHTS OF CREDITORS, FINANCIAL STRUCTURE, GREATER ACCESS, INVESTMENTS, LENDING, CONSUMER PRICE INDEX, CHILD LABOR, CREDIT GROWTH, MACROECONOMIC POLICIES, INSTRUMENT, FIXED COST, MICRO DATA, REMITTANCES, BANK BRANCHES, LABOR MARKETS, LIABILITIES, COMMON LAW, LEGAL RIGHTS, FINANCIAL SECTOR DEVELOPMENT, CREDIT MARKET, INEQUALITY,
Online Access:	http://documents.worldbank.org/curated/en/2016/02/25884473/financial-channels-property-rights-poverty-sub-saharan-african-perspective https://hdl.handle.net/10986/23887
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