The Economic Impact Of Banking The Unbanked: Evidence From Mexico

Abstract

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues.An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished.The papers carry the names of the authors and should be cited accordingly.The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors.They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. Policy Research Working Paper 4981This paper examines the effects of providing financial services to low-income individuals on entrepreneurial activity, employment, and income.The analysis exploits cross-time and cross-municipality variation in the opening of Banco Azteca in Mexico to measure these effects with a difference-in-difference strategy.Banco This paper-a product of the Finance and Private Sector Team, Development Research Group-is part of a larger effort in the department to understand the economic impact of expanding access to finance.

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