Expanding Bank Outreach through Retail Partnerships: Correspondent Banking in Brazil

Anjali Kumar, Ajai Nair, Adam Parsons and Eduardo Urdapilleta

No 7038 in World Bank Publications - Books from The World Bank Group

Abstract: This paper explores the extent to which formal, regulated financial institutions such as banks have been able to partner with "correspondents"- commercial entities whose primary objective and business is other than the provision of financial services. The paper illustrates the case of Brazil, where banks recently have developed extensive networks of such correspondents. Such arrangements result in lower costs and shared risks for participating financial institutions, making these arrangements an attractive vehicle for outreach to the underserved. Correspondent banking requires an enabling environment to emerge, and poses some regulatory challenges and some increase in risk. While there are reasons why this model was particularly successful in Brazil, it may be replicable elsewhere if appropriate regulatory adjustments are undertaken.

Keywords: Finance; and; Financial; Sector; Development-Financial; Intermediation; Public; Sector; Economics; Law; and; Development-Corporate; Law; Education-Education; for; the; Knowledge; Economy; Banks; and; Banking; Reform; Public; Sector; Development (search for similar items in EconPapers)
Date: 2006
ISBN: 978-0-8213-6702-5
References: View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbpubs:7038

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