This report (pdf, 45 pages) by Harvard University focuses primarily on large domestic and multinational commercial banks. These large firms are using increasingly deliberate strategies to expand economic opportunity through business models that serve poor individuals and SME clients. They are also developing initiatives to build human and institutional capacity and using their experience and influence to shape policy frameworks in the regions in which they work.
Despite their potential, to date the impact of large commercial banks on expanding economic opportunity has remained limited in the developing world, where a vicious circle of insufficient information, inappropriate products, inadequate infrastructure, and inflexible regulatory environments has kept costs and therefore process, high, limiting companies' markets to clients within the top tiers of the economic pyramid.
The report finds that one of the most critical obstacles to financial inclusion is informality, but also points the increasing recognition of the market opportunity thanks to
- the increasing acceptance of microfinance, and how the latter has laid the groundwork for an increasing focus on SME finance
- the size and growth rates of remittances
More information:
- New Harvard University research on the role of the private sector in expanding economic opportunity
- Contact point: Beth Jenkins, Director of Policy Studies, Harvard’s John F. Kennedy School of Government
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