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Financial Institutions in Disadvantaged Areas: A Comparative Analysis of Policies Encouraging Financial Inclusion in Britain and the United States

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  • J Neill Marshall

    (Centre for Urban and Regional Development, University of Newcastle upon Tyne, Claremont Road, Newcastle upon Tyne NE1 7RU, England)

Abstract

The paper compares British and US government policy initiatives to combat financial exclusion and promote community reinvestment. Financial exclusion, a general term for those who lack financial products, is concentrated in a small number of deprived urban areas in larger cities that are also starved of private sector investment. British policies, though they have drawn on US experience, predominantly treat exclusion as an individual problem and pay insufficient attention to the wider interconnections between people and place that underlie financial exclusion. These are more prominent in the Community Reinvestment Act (CRA) that has led to significant improvements in financial inclusion and community investment in the USA. The CRA is underpinned by a more compartmentalised and locally embedded system of financial regulation. Consolidation in the banking sector and the growth of competition between banks and other financial institutions in an increasingly integrated US financial sector threaten this. British policies seek to provide ‘joined-up’ solutions to financial exclusion in a manner that is more in tune with an integrated financial sector where a small number of large banks compete on a level playing field with other financial institutions. The paper highlights the difficulties that these policies face in enlisting the cooperation of financial institutions.

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  • J Neill Marshall, 2004. "Financial Institutions in Disadvantaged Areas: A Comparative Analysis of Policies Encouraging Financial Inclusion in Britain and the United States," Environment and Planning A, , vol. 36(2), pages 241-261, February.
    • Handle: RePEc:sae:envira:v:36:y:2004:i:2:p:241-261
    DOI: 10.1068/a3664
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    2. David Damiyano & Stephen Mago, 2023. "An Analysis of the Impact of Financial Inclusion on Poverty and Development: Case of SACU Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 13(6), pages 141-147, November.
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    6. Peterson K. Ozili, 2021. "Financial inclusion research around the world: A review," Forum for Social Economics, Taylor & Francis Journals, vol. 50(4), pages 457-479, October.
    7. Simona Elena Ciobanu, 2024. "Financial Inclusion and Monetary Policy: A Review of Literature," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 3, pages 314-324.
    8. Duncan Fuller & Mary Mellor, 2008. "Banking for the Poor: Addressing the Needs of Financially Excluded Communities in Newcastle upon Tyne," Urban Studies, Urban Studies Journal Limited, vol. 45(7), pages 1505-1524, June.
    9. Chao, Xiangrui & Kou, Gang & Peng, Yi & Viedma, Enrique Herrera, 2021. "Large-scale group decision-making with non-cooperative behaviors and heterogeneous preferences: An application in financial inclusion," European Journal of Operational Research, Elsevier, vol. 288(1), pages 271-293.
    10. Sabrina Bunyan & Alan Collins & Gianpiero Torrisi, 2016. "Analysing Household and Intra-urban Variants in the Consumption of Financial Services: Uncovering “Exclusion” in an English City," Journal of Consumer Policy, Springer, vol. 39(2), pages 199-221, June.
    11. Alison Stenning & Adrian Smith & Alena Rochovská & Dariusz Świątek, 2010. "Credit, Debt, and Everyday Financial Practices: Low‐Income Households in Two Postsocialist Cities," Economic Geography, Clark University, vol. 86(2), pages 119-145, April.
    12. Antonella Francesca Cicchiello & Amirreza Kazemikhasragh & Stefano Monferrá & Alicia Girón, 2021. "Financial inclusion and development in the least developed countries in Asia and Africa," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-13, December.
    13. Luisa Alamá & Emili Tortosa-Ausina, 2012. "Bank Branch Geographic Location Patterns in S pain: Some Implications for Financial Exclusion," Growth and Change, Wiley Blackwell, vol. 43(3), pages 505-543, September.
    14. Elena Magli & Micaela Mazzei & Olga Biosca & Neil McHugh, 2024. "Exploring ‘Alternatives' in the Consumer Credit Market: Community Development Finance Institutions in the United Kingdom," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 115(5), pages 598-614, December.
    15. Shahid Manzoor Shah & Amjad Ali, 2022. "A Survey on Financial Inclusion: Theoretical and Empirical Literature Review," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(4), pages 310-330, December.
    16. Ozili, Peterson K, 2020. "Theories of financial inclusion," MPRA Paper 101810, University Library of Munich, Germany.
    17. Evans, Olaniyi, 2016. "Determinants of Financial Inclusion in Africa: A Dynamic Panel Data Approach," MPRA Paper 81326, University Library of Munich, Germany.
    18. Olaniyi Evans, 2016. "The Effectiveness of Monetary Policy in Africa: Modeling the Impact of Financial Inclusion," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 20(3), pages 327-337, Summer.
    19. Marcello Pagnini & Paola Rossi & Valerio Vacca & Johann Burgstaller, 2017. "Dynamics of Retail-Bank Branching in Austria," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 46(3), pages 527-554, November.
    20. Evans, Olaniyi, 2015. "The Effects of Economic and Financial Development on Financial Inclusion in Africa," MPRA Paper 81325, University Library of Munich, Germany.
    21. Maria Luisa Jaramillo Gomez & Alvaro Turriago Hoyos & Ulf Thoene, 2015. "Financial inclusion from the perspective of social innovation: The case of Colombia," Proceedings of Business and Management Conferences 3104801, International Institute of Social and Economic Sciences.
    22. Josephine Ofosu‐Mensah Ababio & Edward Attah‐Botchwey & Eric Osei‐Assibey & Charles Barnor, 2021. "Financial inclusion and human development in frontier countries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 42-59, January.
    23. Hyoung Jun Kim & Bo Kyeong Lee & So Young Sohn, 2020. "Comparing spatial patterns of sole proprietorship and corporate payday lenders in Seoul, Korea," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 64(1), pages 215-236, February.
    24. Julie Birkenmaier & Qiang Fu, 2018. "Household Financial Access and Use of Alternative Financial Services in the U.S.: Two Sides of the Same Coin?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 139(3), pages 1169-1185, October.
    25. Nathaniel Karp & Boyd Nash-Stacey, 2015. "Technology, Opportunity & Access: Understanding Financial Inclusion in the U.S," Working Papers 1525, BBVA Bank, Economic Research Department.

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