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Models of Including Financially Inactive Population into the Financial System

Author

Listed:
  • Branko Matic
  • Hrvoje Serdarusic

    (Faculty of Economics in Osijek)

Abstract

Raising money and directing it into savings is the most important passive task in banking. Restrictive monetary policy makes it increasingly difficult for banking institutions to take loans, thus they turn to the general population as a money source. Their interest is partly served through inclusion of financially inactive population. As the new legislation will correct the current illogical situation (some deposit institutions have not been under control of the central bank), this will eliminate the unfair competition which is at the moment existing in the banking system. At the same time, the operation of a new form of non-profit deposit institutions, i.e. credit unions, will be regulated. With solidarity and common interest as the basic tenets of their operation they can be attractive to this particular segment of population. The paper explores and proposes some possible models and ways of including the financially inferior population into the financial system.

Suggested Citation

  • Branko Matic & Hrvoje Serdarusic, 2008. "Models of Including Financially Inactive Population into the Financial System," Interdisciplinary Management Research, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 4, pages 296-309, May.
    • Handle: RePEc:osi:journl:v:4:y:2008:p:296-309
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    Citations

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    Cited by:

    1. Matić, Branko & Papac, Nikola, 2010. "Osobine sustava korporativnog upravljanja u bankama u Bosni i Hercegovini [Characteristic of the Corporate Bank Governance System in Bosnia and Herzegovina]," MPRA Paper 29757, University Library of Munich, Germany.
    2. Maja Lamza-Maronic & Jerko Glavas & Igor Mavrin, 2010. "Cultural Management In The Republic Of Croatia - Possibilities Of Development," Interdisciplinary Management Research, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 6, pages 133-142.
    3. Matić, Branko & Vretenar, Maja, 2009. "Gospodarstvo i financijske institucije Brodsko- posavske županije (od sredine 18. do sredine 20. stoljeća) [Economy and Financial Institutions of Brod-posavina County (From the Middle of 18th Centu," MPRA Paper 20597, University Library of Munich, Germany.

    More about this item

    Keywords

    financial system; financially inactive population; money source; solidarity; common interest; credit union.;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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