Financial inclusion and financial integrity : aligned incentives?
de Koker, Louis and Jentzsch, Nicola 2011, Financial inclusion and financial integrity : aligned incentives?, in Shadow 2011 : The shadow economy, tax evasion and money laundering : Proceedings of the 2011 Shadow conference, University of Münster, Münster, Germany, pp. 1-28.
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A large percentage of the population in developing countries saves, remits money or accesses credit using informal financial services. Financial inclusion initiatives aim to expand the reach and attractiveness of formal financial services. Recently, the Financial Action Task Force embraced financial inclusion as complementary to anti-money laundering and counter-terrorist financing as it enhances financial transparency. Analyzing preliminary data from FinScope surveys on eight African countries we argue that an increase in access to formal services does not automatically imply an immediate and corresponding reduction of usage of informal services, especially as many individuals use informal and formal services in parallel. We consider customer trade-offs regarding the use of formal and informal services especially considering transparency as a potential disincentive to use formal services. The alignment of financial inclusion and integrity will fail where customers are apprehensive about increased transparency.
Field of Research
180119 Law and Society
Socio Economic Objective
949999 Law, Politics and Community Services not elsewhere classified
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