Prior, F.; Argandoña Rámiz, Antonio
Do financial institutions in developing countries have any specific social responsibilities? IESE’s Francesc Prior and Antonio Argandoña would say yes – particularly when considering that lack of financial depth is an important obstacle to economic growth in less developed nations. Here the authors present the underlying causes of low financial depth and provide examples of financial industry best practices in three emerging economies: Colombia, Ecuador and Peru.
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Prior, F.; Santomá Juncadella, Javier
Continuing their study of worldwide banking options for the poor, IESE’s Francesc Prior and Javier Santoma focus their attention on the use of prepaid cards as a viable instrument for banking the “unbanked.” The professors suggest that prepaid products or platforms can be used to cover everything from collecting microdeposits to paying monthly bills, potentially empowering untold millions in the United States and Europe.
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Prior, F.; Santomá Juncadella, Javier
In the Philippines, people spend more on cell-phone calls than food. Every day, the country's operators process two billion text messages, an average of 15 per person. This is possible thanks to the country's powerful cell-phone infrastructure. Philippine banks, on the other hand, are not so prolific: for every 10 cell phones, there's only one credit card. Continuing their study of how developing countries could embrace banking services on a broad scale, Francesc Prior and Javier Santomá of IESE turn their attention to the Philippines. Better mobile banking there, they say, could improve the standard of living for millions of people.
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Prior, F.; Santomá Juncadella, Javier
In the United States, more than eight million families are excluded from the financial system. Banking products are designed less for those who need them, more for those who can afford them. For someone earning less than $25,000 a year, even keeping a simple current account can be quite expensive, which feeds the abusive alternative financing sector. In such establishments, workers can pay interest of up to 470 percent of APR just to get advances on their paychecks. Ironically, the situation is reminiscent of some developing world countries that IESE's Francesc Prior and Javier Santomá have studied previously. Their new paper reviews the weaknesses and proposes alternatives for one of the world's richest countries.
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Prior, F.; Santomá Juncadella, Javier
In Morocco, only 45 percent of the population has access to the most basic financial services. That percentage drops to 42 percent in Tunisia and 30 percent in Algeria. While these figures are better then those in sub-Saharan Africa, where often only one in 10 people has seen a European-style bank, they are still a long way off the figures found in developed countries. IESE's Francesc Prior and Javier Santomá know that progress depends largely on the evolution of the economies in Morocco, Tunisia, Algeria and Egypt. While they have so far managed to avoid absolute disaster, they have still not been able to make the next leap. "Acceso a servicios financieros en el Magreb" ("Access to Financial Services in Maghreb") takes a thorough look at what happens in these countries to find out why.
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Prior, F.; Santomá Juncadella, Javier
Withdrawing money from a cash machine, getting credit or paying with plastic: these are normal activities for the majority of citizens in the developed world. However, in poorer countries, they are privileges within reach of only a minority of people. Although this situation is frequently blamed on a lack of demand, IESE Prof. Javier Santomá and researcher Francesc Prior think that it is, in fact, more a problem of supply. They aim to demonstrate this in their paper, "Distribution model of microfinance services for low income segments in developing countries."
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Prior, F.; Santomá Juncadella, Javier
Latin American immigrants represent the fastest-growing segment of the U.S. population, in both number and economic weight. In 2006, this group contributed more than $450 billion to the U.S. economy and sent more than $45 billion to their countries of origin. However, most of these are illegal aliens, which means they are excluded from the mainstream banking system. Between 33 percent and 44 percent of all Latinos are without checking or savings accounts, and must resort to other services that are more expensive and inefficient than traditional banking. The study "Best Practices in Banking for Latin American Immigrants in the United States" ("Mejores prácticas en bancarización de inmigrantes latinoamericanos en Estados Unidos") makes a thorough analysis of the problem, identifying cases that successfully meet Latin American immigrants' need for banking in the United States.
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Prior, F.; Santomá Juncadella, Javier
In Kenya, just 10% of the adult population has access to basic financial services. The situation is worse yet in Uganda and Tanzania (6.7% and 6.4%, respectively), and for Malawi there are not even reliable data available. We see no improvement in the situation when analyzing the volume of private-sector lending, which in these four countries peaks at 22.6% of GDP. Having such a paltry financial supply means that much of the African population is excluded from the banking system, with no other option but to turn to "informal" banks. In their study "Access to Financial Services in the Countries of Southeast Africa," IESE professor Javier Santomá and researcher Francesc Prior propose combining the best practices in microfinance with specific public policies related to the financial and microfinance sectors, in order to increase the use of basic financial services among the African population.
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