Financial Inclusion, Growth and Inequality: A Model Application to Colombia Cover Image

Financial Inclusion, Growth and Inequality: A Model Application to Colombia
Financial Inclusion, Growth and Inequality: A Model Application to Colombia

Author(s): Izabela Karpowicz
Subject(s): Social Sciences, National Economy, Financial Markets
Published by: Wydawnictwo Naukowe Wydziału Zarządzania Uniwersytetu Warszawskiego
Keywords: Financial deepening; financial inclusion; access to finance; inequality

Summary/Abstract: Financial inclusion has been one of the key pillars of Colombia’s development strategy for a number of years. Financial inclusion policies have aimed at channeling microcredit to poor, spreading formal banking system usage, fostering electronic payment acceptance, and making financial services more affordable. Using simulations from a general equilibrium model it is possible to identify the most binding fi nancial sector frictions that preclude financial inclusion of enterprises, and study the effects on growth and inequality of efforts to remove these frictions. The study finds that lowering contraints on collateral promises higher growth while inequality is better tackled through measures that lower the financial participation cost.

  • Issue Year: 6/2016
  • Issue No: 2
  • Page Range: 68-89
  • Page Count: 22
  • Language: English