Corporate Governance and Access to Finance - ESBG

The definition of Access to Finance presents certain differences in WBSImembers depending on the level of development of their countries.In emerging and developing countries, Access to Finance is closelyconnected to the notion of financial inclusion: the provision of access toappropriate, convenient, usable, valuable and affordable financialservices and products to the widest part of the population, especiallythrough the delivery of basic banking services to the low income peopleand the still unbanked, as a way out of poverty (WSBI SantiagoDeclaration). In industrial countries, where the majority of the populationhas access to financial services, the objective is to prevent and avoidfinancial exclusion, in particular in the case of the most vulnerable partsof the population (eg. unemployed, population in rural or remote areas,migrants, single parent households).While in the first case public policies should seek facilitating access to themiddle and low levels of the pyramid, in the second case they are typicallyaddressed at fighting segregation or discrimination against certainsegments of the society that, for different reasons, face difficulties inhaving access to formal financial services.The objective of Access to Finance needs to be balanced with the needto ensure the long term sustainability of the institution, in what the WSBIdefines as the “double bottom line” banking model, according to whichsavings banks have a clear dual mandate to (a) bring a return to thecommunities in which they operate, including to reach the unserved andunderserved groups and (b) try and make a reasonable profit so that theoutreach achieved can be self-sustainable. There is no trade-off betweenfinancial inclusion and profitability and the two objectives pursued byWSBI members are mutually supportive.WSBI members have traditionally worked towards fostering financialaccess as one of their main objectives. Consistent with this view, financialaccess occupies a prominent role in their mission statements and/or visiondesigns. Most of them have also adopted specific tools to achieve thesetargets and set performance indicators that measure their results in termsof Access to Finance. WSBI members globally make a substantialcontribution in deepening financial inclusion (or combating financialexclusion) in their respective regions or countries.20