Basic financial services: A new service of general economic interest?

Abstract

In July 2011, the European Commission released a Recommendation on access to a basic payment account. The contents of this Recommendation (where Member States are required to establish universal service obligations) imply that the Commission considers that services facilitating basic access to the financial system meet the requirements to be classified of general interest. This paper discusses this possibility after studying the phenomenon of the unbanked in the European Union and, more generally, in developed countries.

Are you really Financially Excluded if you Choose not to be Included? Insights from Social Exclusion, Resilience and Ecological Systems

“…Those most at risk of exclusion are unemployed, on low income, single parents, recipients of social assistance, young, old, and those with a low educational attainment or other vulnerable characteristics, such as disability. People with family and friends that are excluded are also at a higher risk of exclusion (Gomez-Barroso and Marban-Flores, 2013; Horska et al , 2013; Marron, 2013). People falling into these categories are more likely to be refused mainstream financial products due to negative account screening (e.g., overdrafts, and bounced cheques), and insufficient identification information, as well as poor credit history and low credit scores (Gomez-Barroso and Marban-Flores, 2013; Marron, 2013; Wentzel et al , 2013).…”

“…On the demand side, people may suffer from self-exclusion (psychological, cultural and educational factors). On the supply side, people may suffer from: physical exclusion (no available local branches), access exclusion (do not fit selection criteria), condition exclusion (unsuitable products), price exclusion (unaffordable), and marketing exclusion (excluded from marketing strategies) (see Leyshon et al , 2006; Cnaan et al , 2012; Gomez-Barroso and Marban-Flores, 2013; Marron, 2013). Evidence suggests financial exclusion can be addressed if demand and supply impediments are lifted (Leyshon et al , 2006; Cnaan et al , 2012; Gomez-Barroso and Marban-Flores, 2013; Marron, 2013).…”

“…On the supply side, people may suffer from: physical exclusion (no available local branches), access exclusion (do not fit selection criteria), condition exclusion (unsuitable products), price exclusion (unaffordable), and marketing exclusion (excluded from marketing strategies) (see Leyshon et al , 2006; Cnaan et al , 2012; Gomez-Barroso and Marban-Flores, 2013; Marron, 2013). Evidence suggests financial exclusion can be addressed if demand and supply impediments are lifted (Leyshon et al , 2006; Cnaan et al , 2012; Gomez-Barroso and Marban-Flores, 2013; Marron, 2013). As such, financial exclusion (or creating financial inclusion) has become a policy priority for many countries (Cnaan et al , 2012) with much of the focus on attempting to address supply and demand (Honohan, 2008).…”

Financial inclusion in Colombia: A scoping literature review

“…Others assert that financial exclusion is a key obstacle to sustainable economic development (Beck & Demirguc-Kunt, 2008;Gómez-Barroso & Marban-Flores, 2013;Honohan, 2008;Hudon, 2008;Marron, 2013). Taken together, these readings reinforce the significance of financial inclusion in the reduction of poverty and inequality through the creation of opportunities for individuals thus far excluded from the financial system.…”

“…Financial exclusion hinders social development (Amaeshi, Ezeoha, Adi & Nwafor, 2007;Buckland & Dong, 2008;Fuller & Mellor, 2008;Gómez-Barroso & Marban-Flores, 2013;Horska et al, 2013;Hudon, 2008;Leyshon et al, 2004;Myers et al, 2012;Solo, 2008).…”