Economics at your fingertips  

Financial sector development and the poor in developing countries: revisiting the access to finance channel

Atul Mehta and Joysankar Bhattacharya
Additional contact information
Atul Mehta: SRM Institute of Science & Technology, Chennai, India
Joysankar Bhattacharya: Indian Institute of Management Indore, Indore, India

Theoretical and Applied Economics, 2018, vol. XXV, issue 3(616), Autumn, 153-168

Abstract: With the help of thorough literature survey, the present study proposes that formal financial services by commercial banks in the developing countries are primarily suitable for the non-poor population and hence acts as a medium-direct channel of financial development to affect the poor whereas the semi-formal financial services by microfinance institutions specifically target the poor in developing countries and thus act as a direct channel. The paper also documents the divergent outcomes of lending through MFIs on the poor in rural areas and explains the coexistence of formal/semi-formal and informal financial markets. The paper further suggests that the future research in the area of finance-poor nexus may focus on providing comparative empirical evidence with respect to the effect of formal, semi-formal and informal finance on the poor in developing countries including the South Asian region. The result of such comparative studies would be of interest to all the key stakeholders in the development finance arena.

Keywords: financial sector; South Asia; poverty; inequality; bank credit; microcredit; economic growth. (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (application/pdf) (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Theoretical and Applied Economics is currently edited by Marin Dinu

More articles in Theoretical and Applied Economics from Asociatia Generala a Economistilor din Romania - AGER Contact information at EDIRC.
Bibliographic data for series maintained by Marin Dinu ().

Page updated 2020-04-28
Handle: RePEc:agr:journl:v:3(616):y:2018:i:3(616):p:153-168