dos Santos, Paulo and Kvangraven, Ingrid Harvold orcid.org/0000-0001-8606-1717 (2017) Better than Cash, but Beware the Costs:Electronic Payments Systems and Financial Inclusion in Developing Economies. Development and change. pp. 205-227. ISSN 0012-155X
Abstract
This article considers current proposals for using electronic payments systems to promote financial inclusion — that is, to widen the availability of financial and monetary services in developing countries. While such systems can generate significant savings in the operation of monetary systems, payment services markets are typically uncompetitive and require regulatory and broader state interventions to ensure those savings are widely distributed. The use of those systems to broaden the reach of for‐profit lenders raises a number of concerns, as a growing literature has documented how microcredit initiatives in developing countries have resulted primarily in expansions in consumption credit to households, often under predatory terms. The authors advance two original arguments in this connection. First, the perverse results of many microcredit initiatives reflect the underdevelopment of the areas concerned: without broader development strategies, potentially transformative productive projects are rare and unprofitable to finance. In contrast, widespread unmet consumption needs ensure consumption credit offers lenders a profitable alternative business orientation. Second, and in light of this, electronic payments platforms can contribute to economic development by enabling the establishment of well‐regulated or public systems of electronic ‘narrow banks’ restricted from lending, but capable of widening access to affordable payments, savings and insurance services.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Dates: |
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Institution: | The University of York |
Academic Units: | The University of York > Faculty of Social Sciences (York) > Politics (York) |
Depositing User: | Pure (York) |
Date Deposited: | 12 Sep 2018 12:10 |
Last Modified: | 16 Oct 2024 14:41 |
Published Version: | https://doi.org/10.1111/dech.12296 |
Status: | Published |
Refereed: | Yes |
Identification Number: | 10.1111/dech.12296 |
Related URLs: | |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:135593 |
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Filename: Dos_Santos_and_Kvangraven_PB_authors.docx
Description: Better than Cash, but Beware the Costs: Electronic Payments Systems and Financial Inclusion in Developing Economies