New Perspectives on Banking and Agendas for Financial Inclusion

Abstract

This paper considers new developments in microfinance, public policy, banking and financial inclusion with a special focus on Brazil. Microcredit and microfinance emerged in the 1970s as alternatives to inefficient state institutions and old ideas about development that valued large industry and state-owned enterprises. The microfinance movement created new networks by linking social movements,nongovemmental organizations, the private sector and capital markets so as to bridge the gap between banks and unbanked citizens in many developing countries. However, problems with excessive profit orientations and pressures from capital markets coincided with the financial crisis of 2007-08 to necessitate an assessment of how governments and public policies, banks and microfinance institutions may reach the bankless poor in developing countries and sustain financial inclusion in advanced economies. This paper reviews experiences with microfinance, regulation, new technologies in banking and their impact on financial inclusion. We find that public banks, historical experiences with social banking, untapped potentials of large savings institutions in developing and emerging countries, new policies of central banks designed to accelerate financial inclusion and new information and communication technologies provide a variety of new perspectives on banking and agendas for financial inclusion.