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Household financial assets in the process of development

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  • Honohan, Patrick
Abstract
Systematic information on household financial asset holdings in developing countries is very sparse. The author reviews some available data and current policy debates. Although financial asset holdings by households are highly concentrated, deeper financial systems are correlated with improved income distribution. For low-income countries, the relevant question for poor households is not how much financial assets they have, but whether they have any access to financial products at all. Building on and synthesizing disparate data collection efforts by others, the author produces new estimates of access percentages for over 150 countries. Across countries access is negatively correlated with poverty rates, but the correlation is not a robust one: thus the supposed anti-poverty potential of financial access remains econometrically elusive. Despite policy focus on the value of credit instruments, it is deposit products that tend to be the first to be used as prosperity increases, before more sophisticated savings products and borrowing.

Suggested Citation

  • Honohan, Patrick, 2006. "Household financial assets in the process of development," Policy Research Working Paper Series 3965, The World Bank.
    • Handle: RePEc:wbk:wbrwps:3965
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    Cited by:

    1. Barrett, Alan & Kearney, Ide & McCarthy, Yvonne, 2006. "Quarterly Economic Commentary, Winter 2006," Forecasting Report, Economic and Social Research Institute (ESRI), number QEC20064, march.
    2. Asongu, Simplice & Nwachukwu, Jacinta C., 2015. "Finance and Inclusive Human Development: Evidence from Africa," MPRA Paper 71787, University Library of Munich, Germany.
    3. Simplice Asongu & Rexon Nting, 2021. "The role of finance in inclusive human development in Africa revisited," Journal of Economic and Administrative Sciences, Emerald Group Publishing Limited, vol. 38(2), pages 345-370, February.
    4. Claire Alexandre & Ignacio Mas & Daniel Radcliffe, 2011. "Regulating New Banking Models to Bring Financial Services to All," Challenge, Taylor & Francis Journals, vol. 54(3), pages 116-134.
    5. Claessens, Stijn & Perotti, Enrico, 2007. "Finance and inequality: Channels and evidence," Journal of Comparative Economics, Elsevier, vol. 35(4), pages 748-773, December.
    6. Beck, Thorsten & Feyen, Erik & Ize, Alain & Moizeszowicz, Florencia, 2008. "Benchmarking financial development," Policy Research Working Paper Series 4638, The World Bank.
    7. Zhu, Kehan & Zhou, Yuhong & Zhao, Jingmei, 2021. "Guaxi and financial exclusion: Empirical evidence from households in China," Pacific-Basin Finance Journal, Elsevier, vol. 67(C).
    8. Isaac Koomson & Renato A. Villano & David Hadley, 2023. "The role of financial literacy in households’ asset accumulation process: evidence from Ghana," Review of Economics of the Household, Springer, vol. 21(2), pages 591-614, June.
    9. Simplice Asongu & Vanessa Tchamyou, 2015. "Inequality, Finance and Pro-Poor Investment in Africa," Working Papers of the African Governance and Development Institute. 15/052, African Governance and Development Institute..
    10. Agnieszka Zawadzka & Małgorzata Grzywińska‐Rąpca, 2023. "Financial savings structure—Eurozone and Visegrad Group," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 699-717, January.
    11. Warnock, Veronica Cacdac & Warnock, Francis E., 2008. "Markets and housing finance," Journal of Housing Economics, Elsevier, vol. 17(3), pages 239-251, September.
    12. Rajat Deb, 2016. "Determinants of Savings in Sukanya Samriddhi Account: Evidence from Tripura," IIM Kozhikode Society & Management Review, , vol. 5(2), pages 120-140, July.
    13. Xiaomeng Lu & Jingna Xiao & Yu Wu, 2021. "Financial literacy and household asset allocation: Evidence from micro‐data in China," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(4), pages 1464-1488, December.
    14. Compaoré, Ali, 2022. "Access-for-all to financial services: Non-resources tax revenue-harnessing opportunities in developing countries," The Quarterly Review of Economics and Finance, Elsevier, vol. 85(C), pages 236-245.
    15. Beck, Thorsten & de la Torre, Augusto, 2006. "The basic analytics of access to financial services," Policy Research Working Paper Series 4026, The World Bank.
    16. Demirguc-Kunt, Asli & Levine, Ross, 2008. "Finance and economic opportunity," Policy Research Working Paper Series 4468, The World Bank.
    17. Laura Capera & Andrés Murcia Pabón & Dairo Estrada, 2011. "Efectos de los Límites a las Tasas de Interés sobre la Profundización Financiera," Temas de Estabilidad Financiera 057, Banco de la Republica de Colombia.
    18. Claessens, Stijn & Feijen, Erik, 2006. "Finance and hunger : empirical evidence of the agricultural productivity channel," Policy Research Working Paper Series 4080, The World Bank.

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