Corporate Governance and Access to Finance - ESBG

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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
The following table shows how the WSBI members under study promotefinancial inclusion with three different activities: density of their branchnetwork (proximity banking), special products for underservedpopulation, and innovative products.Table 7. Access to Finance in the five selected Case StudiesProximity BankingSpecial productsfor unbanked populationOther productsand servicesGermanyYes, present even in lessdeveloped regions.Yes, evolved graduallyto adapt to changingcustomers’ needs.Branches for young people;financial education atschools; special personalizedattention for the senior;microlending for the longterm unemployed.KenyaOperates through the postalnetwork. Agreement withM-PESA and other ATMs.Low requirements to openan account (zero minimumbalance in some cases).Enrolled in the Bill &Melinda Gates FoundationProgram aimed at doublingthe number of accounts forpoor people in five years.PeruAgreements with Agentsand Banco de la Nacion,a public bank with presencein rural areas.Innovative in their productoffering (microfinancetechnologies).In cooperation with the IDB,mortgage loan program thattargets home purchaseswith moderate income.PhilippinesLimited, only 25 branches(no access to post officebranches).Some products: micro -finance, remittances, andSME finance, in particularin the transport sector.Financial educationprogramme.SpainYes, 56% market share.(provision of credit).Cajas the only financialinstitution in 14% ofSpanish municipalities.Yes: remittances services,pledged loans.Microcredits through ObraSocial. Commitment withfinancial education.Source: Own elaboration. Afi, Analistas Financieros Internacionales.69
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BoxesBox 1. German Sparkassen 27Box
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EXECUTIVE SUMMARYBackground and obj
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nnAccess to Finance in enshrined in
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Chart A.Corporate Governance, Acces
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nThe study also shows that Corporat
Page 17 and 18: 1. INTRODUCTION1.1. Focus and objec
Page 19 and 20: WSBI members are by definition acco
Page 21 and 22: For the particular case of developi
Page 23 and 24: 2. THE LINK BETWEENCORPORATE GOVERN
Page 25: Table 2. Main features of the Missi
Page 28 and 29: Access to financeSparkassen promote
Page 30 and 31: All these examples illustrate how p
Page 32 and 33: In the case of Peru, the profits th
Page 34 and 35: Among the WSBI institutions that re
Page 36 and 37: BOX 2. KENYA POST OFFICE SAVINGS BA
Page 38 and 39: The fact that the banking system is
Page 41 and 42: 3. CORPORATE GOVERNANCE -CONCEPTUAL
Page 43 and 44: Figure 2. Sound Governance of Finan
Page 45 and 46: As can be seen in the figure above,
Page 47 and 48: nnnAt the same time, the distance a
Page 49 and 50: The first two elements (the ownersh
Page 51 and 52: nHowever, this does not mean denyin
Page 53 and 54: Cooperatives are similar to mutuals
Page 55 and 56: 3.4. FoundationsFoundations do not
Page 57 and 58: 3.5. Good Corporate Governance prac
Page 59 and 60: F. DISCLOSURE AND TRANSPARENCYPrinc
Page 61 and 62: 4. ACCESS TO FINANCE -CONCEPTUAL FR
Page 63 and 64: 4.1. Financial deepening and improv
Page 65 and 66: The board does not have any executi
Page 67: In other words, sustainable financi
Page 71 and 72: The fourth dimension refers to the
Page 73: Table 8. Access to Finance in the f
Page 76 and 77: Only 27 members established in 21 c
Page 78 and 79: nnDCI (Depth of credit information
Page 80 and 81: 5.2. Corporate Governance and Acces
Page 82 and 83: 5.2.1. Corporate Governance and Ave
Page 84 and 85: Chart 8.Specific Corporate Governan
Page 86 and 87: 5.2.2. Corporate Governance and Ave
Page 88 and 89: Chart 13. Corporate Governance comp
Page 90 and 91: Chart 16. Corporate Governance Inde
Page 92 and 93: Chart 19. Specific Corporate Govern
Page 95 and 96: ANNEX 1: REVIEW OFTHE LITERATUREThe
Page 97 and 98: Even among the relatively narrow un
Page 99 and 100: Figure A.1. Structure of agents' re
Page 101 and 102: The table captures the essence of s
Page 103 and 104: A case study built by Clarke et al
Page 105 and 106: A very recent contribution to the d
Page 107 and 108: For example, in Latin America, WSBI
Page 109 and 110: The paper examines whether a poor e
Page 111 and 112: For the survival of microfinance in
Page 113 and 114: ANNEX 2: CASE STUDIES 32CASE STUDY
Page 115 and 116: It is one of the major characterist
Page 117 and 118: Although Sparkassen are legally and
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Figure A.2. Corporate Loans Market
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Financial education is also an impo
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Corporate GovernanceKPOSB is wholly
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Among the initiatives that the gove
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Related to the concession of credit
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OPERATIONS1. Deposit Base: It was p
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Corporate GovernanceThe Central Ban
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To address the problem of capital,
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Financial inclusion ranges very hig
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CASE STUDY 4:SPANISH SAVINGS BANKS
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The uniform financial regulation of
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Figure A.3. Governing Bodies - Span
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The web-based tool www.rededucacion
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On the liability side, CMAC offer m
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A specificity of CMAC is that the m
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Table A.3.MissionMissionCMAC AREQUI
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As of September of 2009, the twelve
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Furthermore, the consensus culture
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ANNEX 3: QUESTIONNAIREQUESTIONI. Ge
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ANNEX 4:THE HONOHAN INDEX 43COMPOSI
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COMPOSITE MEASURE OF ACCESS TO FINA
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ANNEX 5:QUANTITATIVE RESULTSCountry
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Overall Corporate Governance IndexO
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REFERENCES- Andrianova, S., Demetri
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- FSD Kenya (2009), Financial Secto
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- World Bank (2006) The Role of Pos
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WSBI - ESBG - The Global Voice of S
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