Consumer and Small Business Credit: Building Blocks of the Middle Class

Jan Smith, Tricia Juhn and Christopher Humphrey

Chapter Chapter 4 in Can Latin America Compete?, 2008, pp 79-97 from Palgrave Macmillan

Abstract: Abstract The development of a formal banking system is the sine qua non of competing in an interdependent world. Resilient, complex, and deep (in the sense of reaching across all income levels, including the working poor) banking systems are synonymous with advanced economies, higher growth, and income equality. Banks are essentially intermediating institutions: their function is to convert income and savings into investment and productivity gains. All businesses need credit. In the absence of a financial services industry broadly accessible to the population at large, only the very wealthiest firms and individuals can access the credit they need—and in a closed capital market, as was Latin America’s until 1990, even they are paying too much for it.

Keywords: Credit Card; Financial Service; Banking Sector; World Development Indicator; Foreign Bank (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-61047-7_5

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DOI: 10.1057/9780230610477_5

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