From Pawn Shops to Banks : The Impact of Formal Credit on Informal Households

Ruiz, Claudia

World Bank, Washington, DC

关键词: ABSENCE OF CREDIT;    ACCESS TO BANK;    ACCESS TO CAPITAL;    ACCESS TO CREDIT;    ACCESS TO FORMAL CREDIT;   

DOI  :  10.1596/1813-9450-6634
RP-ID  :  WPS6634

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper examines the effects ofexpanding access to credit on the decisions and welfare ofhouseholds. It focuses on the entry of Banco Azteca, thefirst bank in Mexico targeting households from the informalsector. Panel data suggest that informal households inmunicipalities with Banco Azteca branches experiencedseveral changes in their saving, credit and consumptionpatterns. In order to estimate the impact of Azteca'sentry, the paper develops a dynamic model of householdchoices in which the bank is endogenously selecting themunicipalities for branch openings. The analysis finds thatin municipalities in which the bank entered, households werebetter able to smooth their consumption and accumulate moredurable goods even though the overall proportion ofhouseholds that save went down by 6.6 percent. These resultssuggest that the use of savings as a buffer on incomefluctuations declines once formal credit is available. Whatis more, these effects vary across households. Amonginformal households, those who never receive formal joboffers have the highest decline in saving rates. The modelis also used to evaluate a legislation to cap interest rateslevied by formal credit institutions. Simulations suggestthat if the Mexican government were to cap the interest rateof Azteca at the rate for traditional banks, Azteca wouldstop operating in the poorest and least populated municipalities.