Corporate Governance and Access to Finance - ESBG

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5.2.1. Corporate Governance and Average Deposit SizeWhen considering the Average Deposit Size as a measure of Access toFinance we would expect a negative relationship between the twovariables. As can be seen in Chart 6 below, we find indeed a negativerelationship between both variables in the case of developing countries.For industrial countries the correlation is less clear and, in any case,the small number of observations would seriously question the reliabilityof any such correlation.The rationale for the observed correlation, in the case of developingcountries, has to do with the fact that as the quality of the CorporateGovernance practices of financial institutions with a specific mandate forpromoting Access to Finance improves, these financial institutions outreachalso increases, which in turn is reflected in a lower average deposit.Chart 6. Corporate Governance and Access to Finance –measured as average deposit sizeSource: Own elaboration. Afi, Analistas Financieros Internacionales.The tendency line helps to visualise the correlation between the Overall Corporate Governanceindex at the country level and Access to Finance.82
Since the overall Corporate Governance index includes a countrycomponent and a specific one, it is interesting to observe the isolatedinfluence of the specific component on this Access to Finance measure.The impact of the country component on the average deposit size is alsonegative and the relationship between Corporate Governance andaverage deposit size including the country component is steeper thanwhen only the specific one is considered. This means that the countryCorporate Governance has a positive contribution to Access to Finance.Nevertheless, in this relationship, the specific component is the mainresponsible for the link between Corporate Governance and Accessto Finance.Chart 7. Corporate Governance and Access to Finance –Specific components' effects on average depositSource: Own elaboration. Afi, Analistas Financieros Internacionales.The tendency line helps to visualise the correlation between the Specific Corporate Governanceindex and Access to Finance.Evaluating each of the elements considered in the specific CorporateGovernance index, we observe that when the CEO and the Chairpersonare different persons, the average deposit size is smaller, which reflects ahigher degree of Access to Finance (Chart 8.1). Moreover, compliancewith the audit and rating agencies, or the existence of an internalCorporate Governance Code lead to lower average deposits, as can beseen in Chart 8.2.83
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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
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1. INTRODUCTION1.1. Focus and objec
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WSBI members are by definition acco
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For the particular case of developi
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2. THE LINK BETWEENCORPORATE GOVERN
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Table 2. Main features of the Missi
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Access to financeSparkassen promote
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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 and 68: In other words, sustainable financi
Page 69 and 70: The following table shows how the W
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 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
Page 119 and 120: Figure A.2. Corporate Loans Market
Page 121 and 122: Financial education is also an impo
Page 123 and 124: Corporate GovernanceKPOSB is wholly
Page 125 and 126: Among the initiatives that the gove
Page 127 and 128: Related to the concession of credit
Page 129 and 130: OPERATIONS1. Deposit Base: It was p
Page 131 and 132: 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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