Corporate Governance and Access to Finance - ESBG

Chart 19. Specific Corporate Governance Components and Accessto FinanceDepth and quality of credit informationFinancial DevelopmentSource: Own elaboration. Afi, Analistas Financieros Internacionales.The tendency line helps to visualise the correlation between the i) Quality of credit informationand ii) Financial development and Access to Finance measured as number of deposits per1,000 adults.5.3. Some conclusions based on the statistical evidenceDespite the limited existing data, we find some evidence of a positiverelationship between sound Corporate Governance and Access toFinance. In order to assess this link we started by analyzing country-leveldata, based on Honohan (2007), to estimate access to finance and acomposite indicator calculated by the consultant team, based on WorldBank and World Economic Forum information, for Corporate Governance.The results show a positive relationship between the two variables, whichseems to confirm that the existence and enforcement of legal rights,the scope, accessibility and quality of credit information and the degreeof financial development foster financial inclusion. Moreover, whenobserving those countries where data from the WSBI members wereavailable, higher levels of both Corporate Governance and Access toFinance are related to a higher market share of the WSBI member.This suggests that in countries with a better Corporate Governanceenvironment and a relatively higher presence of institutions with anAccess to Finance mission (like WSBI members) financial outreach tendsto be higher.92