The Urban Unbanked in Mexico and the United States

This paper examines the ways in which lower-income households obtain basic financial services in urban communities in Mexico and the United States. And it discusses the efforts that private sector and government organizations are making to lower the cost or improve the quality of those services. The paper summarizes available information on these issues and assesses the rationale and challenges facing the strategies that both countries are using to improve the financial services available to lower-income households, giving particular attention to "unbanked" households, meaning households that do not have deposit accounts with any regulated deposit-taking institution, and also to lower-income households in large urban areas. In comparing the experiences of the two countries, the paper reviews the extent to which lower-income households are unbanked, their use of non-bank financial services, and strategies for improving financial services to the unbanked. The underlying differences between the countries' typical household incomes-national income per capita in Mexico in 2002 was US$8,540, compared with $35,060 in the United States (World Bank 2003)-may also influence the difference in percentage of unbanked-9.1 percent of families in the United States compared with 76.4 percent found in a recent study in Mexico City.

Bibliographic Details

Main Authors:	Caskey, John P., Durán, Clemente Ruíz, Solo, Tova Maria
Language:	English
Published:	World Bank, Washington, DC 2006-02
Subjects:	ACCESS TO BANKING SERVICES, ACROSS BORDERS, BANK ACCOUNT, BANK ACCOUNTS, BANK LENDING, BANK LOANS, BANK TRANSFER, BANKING INDUSTRY, BANKING SECTOR, BANKING SERVICES, BANKING SYSTEM, BANKS, BENCHMARK, BILL PAYMENT, BILL PAYMENTS, BORROWING, BUSINESS LOANS, CAPITAL MARKETS, CHECK CASHING, COMMERCIAL BANKS, COMMUNITY BANKS, COMMUNITY DEVELOPMENT, CONSUMERS, CREDIT CARD, CREDIT CARDS, CREDIT LINES, CREDIT RISK, CREDIT UNIONS, DEBIT CARD, DEBT, DEPOSIT ACCOUNTS, DEPOSIT INSURANCE, DEPOSITORS, DEPOSITS, DEVELOPMENT BANKING, DIRECT DEPOSIT, ECONOMIC DEVELOPMENT, ECONOMIC EQUILIBRIUM, ECONOMIC GROWTH, ECONOMIC LIFE, ELECTRONIC PAYMENT, ELECTRONIC TRANSFER, EMPLOYMENT, FACE VALUE, FINANCIAL INSTITUTION, FINANCIAL INSTITUTIONS, FINANCIAL INTERMEDIARIES, FINANCIAL INTERMEDIATION, FINANCIAL MARKETS, FINANCIAL SECTOR, FINANCIAL SERVICES, FINANCIAL TRANSACTIONS, GDP, HOME OWNERSHIP, HOMEOWNERS, HOMES, HOUSEHOLDS, HOUSING, IMMIGRANT COMMUNITIES, INCOME, INCOME DISTRIBUTION, INCOME INEQUALITY, INCOMES, INTEREST RATE, INTEREST RATES, INTERNATIONAL REMITTANCES, LABOR COSTS, LARGE CITIES, MICROFINANCE, MIGRANTS, MINIMUM BALANCE REQUIREMENTS, MONEY ORDER, MONEY ORDERS, NATIONAL BANKS, NATIONAL ECONOMY, NATIONAL INCOME, OPPORTUNITY COST, PAYDAY LENDERS, PAYMENT SERVICES, PAYMENTS, POSTAL SAVINGS, PRICE CONTROLS, PRIVATE BANKS, PRODUCTIVITY, PROFITABILITY, PUBLIC POLICY, PURCHASING POWER, REMITTANCE, RETAIL BANKING, RURAL DEVELOPMENT, SAVINGS, SAVINGS INSTITUTIONS, SAVINGS PROGRAMS, SUBSIDIARY, TRANSACTION COSTS, URBAN AREAS, URBAN COMMUNITIES,
Online Access:	http://documents.worldbank.org/curated/en/2006/02/6559581/urban-unbanked-mexico-united-states https://hdl.handle.net/10986/8777
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