Bankable Frontier Weblog

There has been a surge of interest in the past few years in the provision of formal financial services to a much broader section of the population—both in developed countries (see for example, the papers from 2003 Harvard Joint Centre conference on asset building and various developing countries.

A number of factors lie behind the increased swell, such as:

• Well funded donor programmes which focus on this—such as FinMark Trust in southern Africa, which I set up and ran for 2 years to 2004; but counterparts exist in other parts of the world too;
• The declaration of 2005 by the United Nations as the International Year of MicroCredit, which has attracted attention to the issue of access to financial services by poor people in developing countries;
• Competitive pressures in many banking systems which have caused consolidation and eroded returns for many in wholesale or corporate banking; and have led to renewed interest in retail banking as a source of growth, with only the lower part of the market available for growth;
• Better data is coming to hand all the time, which enables better analysis—one example is the national, annual FinScope study in South Africa which released its second annual survey results in November 2004;
• Increasing acceptance that private sector growth, including the financial sector which at very least finances the real sector, is a necessary part of poverty reduction—this was the conclusion of the blue ribbon UN Commission on Private Sector and Development last year;
• Beyond asserting that private firms can cause public good, CK Prahalad has dramatically popularized in his book The Fortune at the Bottom of the Pyramid the notion that there is a good money for nimble, creative large companies—indeed, two of his case studies are financial service related: ICICI Bank in India and Cemex. in Mexico.

The consequence of this is a rising tide of conferences, papers, events and announcements. This blog catalogues, interprets and comments on at least some if it. Like any blog, it reflects a highly personal view. It is not limited to housing microfinance, although indeed that is a topic which has grown in profile of late; rather it addresses the issue of integration and extension of the formal financial system which underpins the issue of retail housing finance provision in most developing countries.