Corporate Governance and Access to Finance - ESBG

But there is a certain risk that the reforms, if applied universally, couldlead to a move back in the financial inclusion process. It is important indesigning the reforms to keep in mind what went wrong. Segments orinstitutions that did not fail do not need to be repaired. And financialinclusion objectives need to be pursued with determination, avoidingputting them aside by the trend to emphasise financial stability.4.3. The double bottom line of WSBI membersSavings banks are by far the largest representatives of “double bottomline”institutions that explicitly target unbanked and underservedcustomers. According to WSBI estimates, these “double bottom-line”institutions provide around 1.4 billion accessible accounts acrossdeveloping and transition economies, three quarters of which (some1.1 billion accounts) come from savings banks 18 .Since 2004, WSBI has published three reference papers 19 related toAccess to Finance. They show the important role savings banks play in theprovision of financial services: savings, payments, credit and to a lesserextent, insurance; how large their distribution networks are, and howclose is the relationship with their customers.All the above has led savings banks to become a reference in their natureas “double-bottom line” financial institutions. Savings banks have longproved that it is possible to ensure long-term sustainability of the institutionwhile facilitating Access to Finance, and that outreach does not have tobe attained at the expense of profitability. Previous research by WSBI hasidentified, as a critical factor in maintaining the balance between bothobjectives, the ability to keep unit costs under control, which is closelyrelated to having products that are simple to understand and to run andthat allow for certain profitability even without high volumes.18 Perspectives 52, September 2006 Savings banks and the double bottom line – A profitableand accessible model of finance, www.wsbi.org/uploadedFiles/Publications_and_Research_(ESBG_only)/Perspectives%2052.pdf.19 WSBI Perspectives 49, Access to Finance – What does it mean and how do savings banksfoster access, January 2006; WSBI Perspectives 52, Savings Banks and the Double BottomLine – A profitable and accessible model of finance, September 2006; WSBI Perspectives56, Who are the Clients of Savings Banks – A poverty assessment of the clients reached bysavings banks in India, Mexico, Tanzania and Thailand, April 2008, accessible fromwww.wsbi.org/template/content.aspx?id=3678.68