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Household Financial Assets in the Process of Development

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  • Honohan, Patrick

Abstract

Systematic information on household financial asset holdings in developing countries is very sparse. The author reviews some available data and current policy debates. Although financial asset holdings by households are highly concentrated, deeper financial systems are correlated with improved income distribution. For low-income countries, the relevant question for poor households is not how much financial assets they have, but whether they have any access to financial products at all. Building on and synthesizing disparate data collection efforts by others, the author produces new estimates of access percentages for over 150 countries. Across countries access is negatively correlated with poverty rates, but the correlation is not a robust one: thus the supposed anti-poverty potential of financial access remains econometrically elusive. Despite policy focus on the value of credit instruments, it is deposit products that tend to be the first to be used as prosperity increases, before more sophisticated savings products and borrowing.

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File URL: http://www.wider.unu.edu/stc/repec/pdfs/rp2006/rp2006-91.pdf
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Bibliographic Info

Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number RP2006/91.

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Length: 44 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:unu:wpaper:rp2006-91

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Keywords: household behaviour; asset holding; credit; income distribution; poverty;

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References

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  1. Thorsten Beck & Asli Demirguc-Kunt & Ross Levine, 2004. "Finance, Inequality, and Poverty: Cross-Country Evidence," NBER Working Papers 10979, National Bureau of Economic Research, Inc.
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  3. Honohan, Patrick, 2005. "Measuring microfinance access : building on existing cross-country data," Policy Research Working Paper Series 3606, The World Bank.
  4. Davies, James B. & Sandstrom, Susanna & Shorrocks, Anthony & Wolff, Edward N., 2008. "The World Distribution of Household Wealth," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) DP2008/03, World Institute for Development Economic Research (UNU-WIDER).
  5. Luigi Guiso & Michael Haliassos & Tullio Jappelli, 2003. "Household stockholding in Europe: where do we stand and where do we go?," Economic Policy, CEPR;CES;MSH, CEPR;CES;MSH, vol. 18(36), pages 123-170, 04.
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  15. Subramanian, S. & Jayaraj, D., 2006. "The Distribution of Household Wealth in India," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) RP2006/116, World Institute for Development Economic Research (UNU-WIDER).
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  17. Dehejia, Rajeev H. & Gatti, Roberta, 2002. "Child labor : the role of income variability and access to credit in a cross-section of countries," Policy Research Working Paper Series 2767, The World Bank.
  18. Tokuo Iwaisako, 2003. "Household Portfolios in Japan," NBER Working Papers 9647, National Bureau of Economic Research, Inc.
  19. Simeon Djankov & Caralee McLiesh & Andrei Shleifer, 2005. "Private Credit in 129 Countries," NBER Working Papers 11078, National Bureau of Economic Research, Inc.
  20. Patrick Honohan, 2004. "Financial development, growth, and poverty: how close are the links?," Policy Research Working Paper Series 3203, The World Bank.
  21. Neven Valev & Felix Rioja, 2002. "Finance and the Sources of Growth at Various Stages of Economic Development," International Center for Public Policy Working Paper Series, at AYSPS, GSU, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University paper0217, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  22. Giannetti, Mariassunta & Koskinen, Yrjö, 2003. "Investor Protection and the Demand for Equity," Working Paper Series in Economics and Finance 526, Stockholm School of Economics, revised 14 May 2003.
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Citations

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Cited by:
  1. Laura Capera & Andrés Murcia Pabón & Dairo Estrada, . "Efectos de los Límites a las Tasas de Interés sobre la Profundización Financiera," Temas de Estabilidad Financiera, Banco de la Republica de Colombia 057, Banco de la Republica de Colombia.
  2. Warnock, Veronica Cacdac & Warnock, Francis E., 2008. "Markets and housing finance," Journal of Housing Economics, Elsevier, Elsevier, vol. 17(3), pages 239-251, September.
  3. Beck, Thorsten & de la Torre, Augusto, 2006. "The basic analytics of access to financial services," Policy Research Working Paper Series 4026, The World Bank.
  4. Beck, Thorsten & Feyen, Erik & Ize, Alain & Moizeszowicz, Florencia, 2008. "Benchmarking financial development," Policy Research Working Paper Series 4638, The World Bank.
  5. Claessens, Stijn & Feijen, Erik, 2006. "Finance and hunger : empirical evidence of the agricultural productivity channel," Policy Research Working Paper Series 4080, The World Bank.
  6. Claessens, Stijn & Perotti, Enrico, 2007. "Finance and inequality: Channels and evidence," Journal of Comparative Economics, Elsevier, vol. 35(4), pages 748-773, December.
  7. Veronica Cacdac Warnock & Francis E. Warnock, 2008. "Markets and Housing Finance," Working Papers 032008, Hong Kong Institute for Monetary Research.
  8. Barrett, Alan & Kearney, Ide & McCarthy, Yvonne, 2006. "Quarterly Economic Commentary, Winter 2006," Forecasting Report, Economic and Social Research Institute (ESRI), Economic and Social Research Institute (ESRI), number QEC20064, March.
  9. Demirguc-Kunt, Asli & Levine, Ross, 2008. "Finance and economic opportunity," Policy Research Working Paper Series 4468, The World Bank.

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