63332 Financial Access 2010 The State of Financial Inclusion Through the Crisis F I N A N C I A L A CC E S S 2 0 1 0 i Financial Access 2010 The State of Financial Inclusion Through the Crisis THE WORLD BANK GROUP © 2010 by the Consultative Group to Assist the Poor/The World Bank Group MSN P 3-300, 1818 H Street, NW, Washington DC 20433 USA All rights reserved Manufactured in the United States of America First printing September 2010 This volume is a product of the staff of the Consultative Group to Assist the Poor (CGAP) and the World Bank Group, and the judgments herein do not necessarily reflect the views of CGAP’s Council of Governors or Executive Committee or the World Bank Group’s Board of Executive Directors or the countries they represent. CGAP and the World Bank Group do not guarantee the accuracy of the data included in this publication and accept no responsibility whatsoever for any consequence of their use. 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Design and layout by Gerry Quinn Information Design, Cabin John, MD. If you have questions or comments about this product, please contact: CGAP MSN P 3-300 The World Bank Group 1818 H Street, NW Washington DC 20433 USA Phone: 202-473-9594 Fax: 202-522-3744 E-mail: cgap@worldbank.org Web: www.cgap.org/financialindicators F I N A N C I A L A CC E S S 2 0 1 0 CO N T E N T S Acknowledgments iv Overview 1 Changes in access to financial services 5 Deposit services 5 Access to credit services 9 Physical outreach 11 Financial inclusion mandates 16 Consumer protection 23 Legal framework 24 Institutional structure 28 Dispute resolution mechanisms 31 Regional trends in consumer protection 33 SME finance: Supply-side data availability 35 Data availability 43 Methodology 45 References 47 Regional profiles 49 Statistical and policy tables 55 Consumer protection legislation 88 iv F I N A N C I A L A CC E S S 2 0 1 0 ACKNOWLEDGMENTS Financial Access 2010 was made possible by the generous contribution of time and expertise by central bank and financial regulatory authority officials in the 142 economies who responded to this year’s survey. The report was researched and written by a team led by Nataliya Mylenko and comprising Hédia Arbi, Oya Pinar Ardic, Kristine Cronin, Maximilien Heimann, Joyce Ibrahim, and Valentina Saltane. The report benefited from review by a panel of experts including Thorsten Beck, Asli Demirgüç-Kunt, Gregory Chen, Susanne Dorasil, Erik Feyen, Michael J. Fuchs, Michael Goldberg, Neil Gregory, Jake Kendall, Alexia Latortue, Samuel Maimbo, Maria Soledad Martinez Peria, Ignacio Mas, Atsushi Oshima, Douglas Pearce, S. Rajcoomar, Xavier Reille, Roberto Rocha, Richard Rosenberg, Peer Stein, Jeanette Thomas, Marilou Uy, and Kim Nguyen Van. Juan Carlos Izaguirre, Katharine McKee, and Sue Rutledge provided guidance on the topic of consumer protection. The section on small and medium enterprise finance data benefited from inputs from Joshua Wimpey and Rita Ramalho. World Bank regional staff assisted in the data collection process and provided valuable guidance in the drafting of the report. Gerry Quinn designed the report and the graphs. Anna Nunan proofread the report. F I N A N C I A L A CC E S S 2 0 1 0 1 OVERVIEW Financial Access 2010 is the second in a series of annu- The positive relationship between financial develop- al reports by CGAP (Consultative Group to Assist the ment and economic growth is well documented in the Poor) and the World Bank Group to monitor statistics literature.2 In more recent years, the debate has ex- for financial access around the world and to inform panded to include the notion of financial “exclusion” the policy debate. The series was launched in response as a barrier to economic development and the need for to the increasing interest in financial inclusion among building inclusive financial systems.3 Recent empirical policy makers and the development community. The evidence using household data indicates that access first report, Financial Access 2009, introduced statis- to basic financial services such as savings, payments, tics on the use of financial services in 139 economies and credit can make a substantial positive difference in and mapped a broad range of policies and initiatives poor people’s lives.4 For firms, especially SMEs, lack of supporting financial inclusion. access to finance is often the main obstacle to growth.5 Building on last year’s data, Financial Access 2010 reviews Access to basic financial services continued to improve, albeit at a slower rate, as the survey responses from 142 economies, updates statistics financial crisis took its toll on the use of financial services, and analyzes changes that took place in 2009—a turbulent year for the financial sec- Nearly 60 percent of the economies experienced a con- tor in most economies. In addition, Financial Access 2010 traction in real per capita income in 2009 as a result of expands on last year’s work by reviewing three policy ar- the deepening of the global financial crisis. Worldwide eas relevant to the current financial access debate: finan- volume of deposits and loans shrank, with a median cial inclusion mandates, consumer protection in finan- decrease of 12 percent in the ratio of deposit value to cial services, and access to finance by small and medium gross domestic product (GDP) and a median decrease enterprises (SMEs). The report does not intend to suggest of 15 percent in the ratio of value of loans to GDP. De- that these three topics are the most important ones for fi- spite this fact, Financial Access 2010 finds that use of nancial inclusion. Rather, these topics are timely because basic deposit services expanded, showing a 4 percent much of the discussion in the aftermath of the financial median growth rate in the number of deposit accounts crisis centered on the role of the government in finan- per 1,000 adults. Use of credit services suffered more cial services, financial consumer protection regimes, and from the crisis, and on average, the number of loans the urgent need for jobs. Consequently, the report seeks per 1,000 adults remained broadly unchanged between to clarify the role of financial regulators in implement- 2008 and 2009. ing policies to support the financial inclusion agenda. For the first time, it provides a detailed overview of the A simultaneous increase in the number of accounts main features of financial consumer protection regimes, and decrease in the value of deposits support the view a topic of great interest to policy makers in the aftermath that access to savings and payment services is a basic of the financial crisis. Financial Access 2010 also surveys need. The use of these services is inelastic with respect availability of data on SME financing to contribute to the to the macroeconomic conditions. This finding under- global effort to improve the measurement of SME financ- scores the need to promote access to basic payments ing led by the G-20.1 and savings services as essential tools in an increas- ingly digitized and globalized world. Financial Access 2010 aims to contribute to the efforts to measure financial access at the country level world- Physical outreach of the financial system, consist- wide, to develop a consistent database, and to present ing of branch networks, automated teller machines the data in a coherent manner for future analyses. At (ATMs), and point-of-sale (POS) terminals, expanded the same time, the report recognizes that not all institu- in 2009. ATM and POS networks expanded faster than tions that serve low-income and poor people report to bank branches. The macroeconomic situation strong- the financial regulators. However, evaluation of specific ly influenced changes in retail infrastructure, and policy interventions is beyond the scope of this report. economies hit by the crisis saw bank branches close. 2 F I N A N C I A L A CC E S S 2 0 1 0 Low- and middle-income countries lag behind proxy for implementation capacity. On average, high-income countries in terms of the number of across the financial inclusion topics surveyed, bank branches, ATMs, and POS terminals. How- only about 80 percent of economies with re- ever, the number of ATMs exceeded the number sponsibility for a financial access area have an of bank branches for the first time in low-income allocated team or unit implementing the policy. countries. New technological developments and The capacity gap is larger in low-income coun- the expansion of electronic payments through tries, with the paradox that it is precisely in these mobile and Internet banking offer hope for economies that the agenda is broader. Taking a bringing financial services closer to clients. systematic approach and having a clear financial access strategy as an organizing principle for im- Even though access to deposit services continued plementing financial access reforms may help in to expand, data analysis points to the importance planning resources better. The Financial Access of macroeconomic and financial stability for ac- 2010 data indicate that economies with financial cess. Further research is needed to better under- inclusion strategies are more likely to cover more stand the transmission channels and potential topics and have allocated resources. feedback loops between financial stability and access and to identify policy solutions aiming to Consumer protection: Legislation is in place, but implementation and balance both objectives in a sustainable manner. enforcement are often lacking Financial inclusion mandates are on the One key message that can be taken from the agenda of many financial regulators global financial crisis has been the lack of sound and reform efforts are widespread, but implementation capacity is often limited financial regulations, including consumer pro- tection. The number of legislative and institu- Over the past year, government interest in finan- tional reforms introduced in recent years show cial inclusion has heightened in many countries. that consumer protection has garnered the atten- This interest spans from promotional activities tion of policy makers worldwide. Many econo- to encourage savings or access to financial ser- mies are introducing new regulations requiring vices in rural areas to the establishment of new information disclosure on financial products to regulations or financial capability programs. the consumer and curtailing abusive practices Data from the Financial Access 2010 survey against consumers. Financial Access 2010 finds show that in 90 percent of economies, at least that in 118 out of 142 economies responding to some aspect of the financial inclusion agenda is the survey, some form of financial consumer pro- under the purview of the main financial regula- tection legislation is in place. tor. Consumer protection and financial literacy issues, often as a part of standard conduct of But legislation is often broad and does not cover business regulations and supervision mandates, issues specific to the financial industry. Only half are the most common areas of focus across all of the economies have legal provisions restrict- income groups and regions. Financial regulators ing unfair and high-pressure selling practices in low- and middle-income countries are more and abusive collection practices. The require- likely to focus on promoting access to deposit ment to periodically disclose account informa- and credit services. tion is present in half of the economies that have a requirement for account opening. In most But financial regulators do not always have suf- cases, regulations do not apply to unregulated ficient authority and resources to implement a financial service providers. broad financial access agenda. The survey uses the existence of an allocated team or unit as a F I N A N C I A L A CC E S S 2 0 1 0 3 Lack of resources, institutional capacity, and enforce- Financial regulators in two-thirds of economies re- ment powers obstruct the effective implementation port collecting SME finance data. In many countries, of consumer protection legislation. The data provided financial regulators are well placed to collect SME by financial regulators via the Financial Access 2010 lending data as part of regular reporting by financial survey show a stark discrepancy between the stated institutions. This year 50 economies provided data requirements and the available enforcement powers, on the volume of SME finance using their national capacity, and mechanisms. Regulators in only about definition. Data analysis indicates that further efforts half of the economies are empowered to issue warn- are necessary to define the criteria and processes for ings or impose fines on financial institutions violating the collection of data on SME financing to facilitate consumer protection regulations. A public notice of cross-country comparison. The SME finance subgroup violation—one of the most effective deterrence tools— under the G-20 Financial Inclusion Experts Group,6 can be used in only about a third of economies. Regu- bringing together international experts, development lation and supervision of consumer protection issues agencies, and governments to establish a comprehen- are often part of broader business conduct regulations sive, consistent, and scalable framework to measure and supervision mandates, with neither resources nor and track the progress over time of SME access to fi- teams specifically dedicated to the issues of financial nancial services in the developing world, is promising consumer protection. Among regulators with an over- in this regard. sight responsibility in consumer protection, only about two-thirds have an allocated unit or team working on Based on the data provided by regulators this year, consumer protection. global volume of SME finance is an estimated $10 tril- lion. To put this number into perspective, it is roughly The success of enforcement also depends on active con- two-thirds of the current size of the U.S. economy. sumers who are willing to seek recourse when they feel The bulk of this estimated SME lending volume—70 they have been treated unfairly by financial institutions. percent—is concentrated in high-income OECD (Or- Therefore, effective dispute resolution mechanisms are ganisation for Economic Co-operation and Develop- essential to implementation of the law. Yet such mecha- ment) countries. The SME finance segment is small in nisms are not very common: Only 58 percent of econo- relation to the size of the GDP in low- and middle- mies reported the existence of a third-party dispute income countries compared with that of high-income resolution mechanism. Where available, the effective- countries. The median ratio of SME loans to GDP in ness of such mechanisms is hard to evaluate because high-income countries is 13 percent, compared with not many economies keep track of the number of com- only 3 percent in developing countries. plaints received and disputes resolved. SME finance: Many regulators collect NOTES statistics on SME finance volumes, but lack of a consistent definition makes global estimates 1. The Pittsburgh G-20 Summit (2009). challenging 2. See, for example, Beck, Levine, and Loayza (2000), Beck, Demirgüç-Kunt, and Levine (2004), Demirgüç-Kunt and Mak- Ensuring that households have access to a broad range simovic (1998), King and Levine (1993), and Klapper, Laeven, and Rajan (2006). of financial services is a critical objective of the financial 3. Beck, Demirgüç-Kunt, and Martinez Peria (2008b). inclusion agenda. Expanding access to financial services 4. Caskey, Durán, and Solo (2006); Dupas and Robinson (2009). to SMEs is another. For the first time, Financial Access 5. Schiffer and Weder (2001); Cressy (2002); IADB (2004); Beck, 2010 asked financial regulators whether they collect in- Demirgüç-Kunt, and Levine (2005); Beck and Demirgüç-Kunt formation on SME finance and how they define SMEs. (2006); Beck, Demirgüç-Kunt, and Martinez Peria (2008a). 6. See the Pittsburgh G-20 Summit (2009), “Leaders’ Statement,” paragraph 41. 4 F I N A N C I A L A CC E S S 2 0 1 0 MAP 1.1 Percentage of banked households, 2009 Europe & Central Asia 50% High-Income OECD and Non OECD 91% East Asia & Pacific 42% Middle East & North Africa South Sub-Saharan 42% Africa 12% Asia 22% Latin America & Caribbean 40% % of households with a deposit account in a formal financial institution 0–25 Note: OECD = Organisation for Economic Co-operation and Development 25–50 The map uses data from household surveys including Living Standard Measurement Surveys where available, as well as regional sources: for the EU, the European Commission’s Eurobarometer, Special Barometer 260 (2007); for Africa, 50–75 FinMark Trust’s FinScope; for Latin America, Tejerina and Westley (2007) and the MECOVI database and Barr et al. (2007); and Nenova et al. (2009). For countries for which these data are unavailable, predictions based on an econometric model 75–100 with number of deposit accounts per 1,000 adults and number of branches per km2 from the Financial Access database NO DATA are used. See the section on Methodology for more details. Data for Taiwan (China), Hong Kong SAR (China), and Puerto Rico (US) have been broken out from the national dataset. F I N A N C I A L A CC E S S 2 0 1 0 5 C H A N G E S I N A CC E S S TO F I N A N C I A L S E R V I C E S DEPOSIT SERVICES Almost all economies in Sub-Saharan Africa are below this world average, whereas high-income countries are Access to deposit services varies greatly across differ- above it. Sub-Saharan Africa and South Asia are the ent parts of the world. Financial Access 2010 estimates regions with the lowest share of banked households. that about half of the households in the world have The percentage of households having deposit accounts no access to a bank account. The immediate—and in a formal financial institution varies greatly across obvious—consequence of this situation is that the countries, from below 1 percent in the Democratic poor have to rely on informal financial services that Republic of Congo and Afghanistan to close to 100 may be more costly and less reliable. This inequality percent in Japan. robs people, especially the poor and most vulnerable, The number of deposit accounts continued of important options to manage their irregular cash to expand despite the crisis, though deposit flows and smooth consumption.1 At the more macro volume declined significantly level, low levels of financial inclusion represent an obstacle to economic development.2 Consequently, In 2009 as the global financial crisis unfolded, about financial inclusion has become an important topic in 60 percent of economies experienced a decline in real the development agenda. per capita GDP, and for those that went through ex- pansions, median growth was only 2.1 percent.5 Dete- How many people use deposit services offered by commercial banks? riorating macroeconomic conditions affected the de- posit volume around the globe as individuals and firms Map 1.1 gives a broad view of access to deposit ser- had to tap into their savings. Seventy-seven percent vices around the world. The map plots the percentage of economies in the Financial Access 2010 database of households that have a deposit account in a formal experienced a decline in deposit-to-GDP ratio, with financial institution using information from various an average decline of 11.8 percent. The overall world household surveys and estimates based on the data deposit-to-GDP ratio decreased from 72 percent at the from the Financial Access 2010 survey.3 To identify end of 2008 to 66 percent at the end of 2009.6 gaps in access, one would ideally evaluate information FIGURE 1.1 on the number of individuals using various types of More accounts, less money in commercial banks financial services, preferably disaggregated into socio- % change, 2008–09 economic groups. Though household surveys some- times provide this information, it is not available for 4.3 Number of deposit accounts a large enough number of economies to enable us to per 1,000 adults 2008 assess the global picture.4 Nonetheless, data collected through the Financial Access 2010 survey combined with the information from existing household surveys allow us to estimate that 49 percent of households— or about half of the world—have deposit accounts in Commercial formal financial institutions. bank deposits / GDP –11.8 Source: Financial Access database. 6 F I N A N C I A L A CC E S S 2 0 1 0 FIGURE 1.2 Lower deposit values, more deposit accounts in most regions Commercial bank deposits / GDP Number of deposit accounts per 1,000 adults % change, 2008–09 % change, 2008–09 20 20 8 8 2 4 3 0 0 1 –1 –8 –3 –12 –10 –12 –20 –18 –20 –22 –40 –40 EAP ECA HI LAC MENA SA SSA EAP ECA HI LAC MENA SA SSA Region Region Source: Financial Access database. Note: EAP=East Asia and the Pacific region, ECA=Europe and Central Asia region, HI=High-Income OECD, LAC=Latin America and the Caribbean region, MENA=Middle East and North Africa region, SA=South Asia region, and SSA=Sub-Saharan Africa region Yet even in the midst of the crisis, the use of financial except for East Asia and the Pacific and Europe and services continued to expand. The number of deposit Central Asia. Note that these regional averages should accounts per 1,000 adults increased in 69 percent of be interpreted with caution because of differences in the economies reporting data. The world as a whole intraregional variation, as figure 1.2 displays. added 65 accounts per 1,000 adults in 2009, which is roughly a 10 percent increase in the median number The variation in changes in the number of deposit of accounts per 1,000 adults. Growth has been uneven accounts and the volume of deposits exhibit simi- across countries, however, and the median change was lar patterns across income groups. Middle-income only 4.3 percent (figure 1.1).7 and high-income countries on average experienced a larger decline in volume of deposits as a percentage of Changes in volume of deposits and number of deposit GDP than did the low end of the world income dis- accounts differ substantially across regions (figure 1.2). tribution, mostly because of the effect of the financial Economies in Eastern Europe and Central Asia, where crisis. Though the largest median increase in deposit the financial system was severely affected by the crisis, account penetration is observed in the poorest 20 per- show the largest median drop in deposit-to-GDP ratio cent of countries, the richest 20 percent have seen only at 22 percent. At the same time, South Asia experienced a slight expansion. a marginal increase in the median deposit-to-GDP ratio. Sub-Saharan Africa, the region with the lowest Expansion of access to deposit services level of deposit account penetration, experienced the second largest median increase in the number of de- Because of endogeneity issues involved with the cross- posit accounts per 1,000 adults, surpassed only by Latin country regression framework and data limitations America and the Caribbean. The number of accounts (especially in terms of time dimension), uncovering per 1,000 adults on average increased in all regions statistically significant causal effects in the current F I N A N C I A L A CC E S S 2 0 1 0 7 context is not possible. Hence, rather than drawing Macroeconomic factors, physical infrastructure, and the structure of financial conclusions about causal relationships, Financial Ac- markets play an important role in deposit cess 2010 focuses on investigating correlations and penetration partial associations between country-level variables. Consistent with previous research, cross-country anal- The analysis of the changes in the number of depos- ysis using Financial Access 2010 data indicates that a it accounts per 1,000 adults between 2008 and 2009 number of macroeconomic factors are correlated with highlights the importance of macroeconomic stability the level of deposit account penetration.9 Income per and growth for improving financial access. The change capita is strongly correlated with the number of de- in the number of accounts per 1,000 adults is strongly posit accounts. A 1 percent change in GDP per capita positively correlated with macroeconomic outlook, is associated with a change of around 0.3 to 0.6 percent measured by short-run forecasts of real per capita in the number of deposit accounts per 1,000 adults. GDP growth.8 In addition, lower deposit penetra- Branch penetration and the existence of explicit de- tion at the end of 2008 is positively associated with a posit insurance are also positively related to deposit greater change in the number of deposit accounts per account penetration. 1,000 adults. Figure 1.3 plots this negative association between deposit penetration at the end of 2008 and Physical infrastructure indicators, including elec- the change in the number of accounts in 2009 after tricity consumption, phone lines, and the number of controlling for expected real per capita GDP growth. landline and cell phone users, are all positively related The results indicate that access to basic deposit servic- to the number of branches and to deposit penetration, es continues to improve, but macroeconomic stability indicating that a better developed infrastructure and a and growth are essential for sustainable improvement higher degree of deposit penetration go hand in hand. in financial access. The legal environment, measured by the index of the strength of legal rights for borrowers and lenders, is FIGURE 1.3 Financial inclusion: Change in deposit penetration is larger also closely related to deposit penetration. A favorable for economies with fewer initial deposit accounts legal environment for lending may enable banks to % change, deposit accounts per 1,000 adults, 2008–09 operate more profitably through lending and to grow, Higher eventually leading to expansion of deposit services.10 A greater degree of competition, proxied by the con- centration ratio in the banking sector, is associated with greater deposit penetration. This is in line with earlier studies arguing that competition in the bank- ing sector would increase efficiency and, in turn, would lead to a larger variety of products and services offered to a larger depositor base.11 The analysis of the Lower correlation between interest rate spread (lending rate minus deposit rate) and deposit account penetration Fewer Greater Number of deposit accounts per 1,000 adults lends support to this argument. Economies with lower interest rate spreads also show a higher number of de- Source: Financial Access database. Note: Correlation controls for expected real GDP growth in 2009–10. The relationship is significant posit accounts per 1,000 adults. at the 5 percent level. 8 F I N A N C I A L A CC E S S 2 0 1 0 FIGURE 1.4 Analysis of the volume of deposits normalized by GDP Commercial banks hold most deposits by volume offers further insight into the factors affecting finan- % of total volume by type of institution and depositor cial access. Although inflation, as a proxy of macro- Deposits in nonbank economic stability, is not significantly correlated with institutions Individual the number of deposit accounts, it is negatively related deposits Business 13% to deposit volume. In other words, macroeconomic deposits stability seems to matter for the decision of how much 2% money to put in the bank account, but not for hav- Deposits in commercial ing an account at all. This result is consistent with the banks 85% Business Individual evidence of a simultaneous decrease in deposit vol- deposits deposits 23% 62% ume and increase in number of accounts despite the financial crisis. It also supports the view that a deposit account is a basic service, and having one is inelastic with respect to macroeconomic disturbances. Source: Financial Access database. Banks versus nonbanks and access to deposit services tical analysis shows that among nonbanks, the change in the number of accounts is different from zero only Not surprisingly, central banks and financial regulators for state specialized financial institutions. Moreover, have the most complete information on commercial the changes in the number of accounts in commercial banks as they are often the institutional type most di- banks and in state specialized financial institutions are rectly, and for the longest time, under the purview of not different from one another. the regulators. However, many nonbank institutions also provide financial services and some even have spe- The majority of the deposits by number and volume are cific financial inclusion mandates. These include coop- held in commercial banks: 85 percent of total deposit eratives, specialized state financial institutions, and mi- volume and 96 percent of all deposit accounts (figure crofinance institutions. Robust analysis of the changes 1.4). Often a country’s legal framework does not allow in the number and volume of deposits between banks any other institutions to take deposits. But in a num- and nonbanks is challenging because of data limita- ber of economies nonbanks play an important role in tions for nonbanks. The challenge is threefold. First, providing basic deposit services. For example, in Bu- in a number of economies information on nonbanks is rundi, Chile, Spain, and France, cooperatives or spe- not available. Second, financial institutions in a number cialized state financial institutions hold more deposit of economies changed their status or new institution accounts than do commercial banks. And in a num- types were introduced contributing to breaks in a time ber of West African countries—Benin, Burkina Faso, series. Third, only partial data on each nonbank group Côte d’Ivoire, and Niger—deposit-taking microfinance may be available, distorting comparison of banks and institutions have more depositors than do commercial nonbanks within the system. Once economies with banks, which suggests that nonbanks can be an impor- data inconsistencies are excluded, the resulting subset tant player in providing basic deposit services. of economies with comparable data for each institu- tional category is small. For example, for cooperatives Individual deposits account for 75 percent of the total only 20 economies have comparable data for a change volume and 96 percent of the number of accounts. Indi- in the number of deposit accounts; for specialized state vidual deposits represent a greater share of deposit vol- financial institutions it is 22; and for microfinance insti- ume than do firm deposits in banks (73 percent) and in tutions only 8 economies have comparable data. Statis- nonbank financial institutions combined (86 percent). F I N A N C I A L A CC E S S 2 0 1 0 9 ACCESS TO CREDIT SERVICES FIGURE 1.6 Changes in volume and number of loans vary widely Number of loan accounts broadly stayed across regions unchanged, but lending volumes declined Commercial bank loans / GDP significantly % change, 2008–09 40 Credit services fared much worse than deposits in 2009. Indeed, the global financial crisis took its toll on access 30 to credit services, with the value of loans as a percent- 20 age of world GDP declining from 74 percent to 65 per- cent.12 In about 85 percent of economies, loan volume 10 as a share of GDP declined in 2009. At the same time 0 throughout the year, the number of outstanding loans per 1,000 adults remained more or less unchanged. –10 –9 –9 –11 Figure 1.5 plots changes in loan volume and number of –13 –18 –18 –20 outstanding loans in commercial banks. –27 –30 These averages conceal a substantial degree of variation –40 across economies and regions (figure 1.6). The number of outstanding loans per 1,000 adults decreased in 57 –50 percent of the economies. While the changes are posi- EAP ECA HI LAC MENA SA SSA tive on average in the Middle East and North Africa, Region declines are observed, on average, in Europe and Cen- tral Asia and South Asia. All economies in the Middle Number of loan accounts per 1,000 adults East and North Africa, except for Israel, have under- % change, 2008–09 50 gone expansions in the number of outstanding loans. Conversely, all economies in Europe and Central Asia, 40 except for Albania and Turkey, have had contractions in the number of outstanding loans. 30 FIGURE 1.5 20 Loan volume of commercial banks fell by 15% in 2009 12 % change, 2008–09 10 10 2008 Number of 0 –1 –1 –2 –1.4 loan accounts –6 per 1,000 adults –10 –10 –20 –30 EAP ECA HI LAC MENA SA SSA Loan volume / GDP –15.2 Region Source: Financial Access database. Source: Financial Access database. Note: EAP=East Asia and the Pacific region, ECA=Europe and Central Asia region, HI=High-Income OECD, LAC=Latin America and the Caribbean region, MENA=Middle East and North Africa region, SA=South Asia region, and SSA=Sub-Saharan Africa region 10 F I N A N C I A L A CC E S S 2 0 1 0 FIGURE 1.7 Higher growth in loan accounts is associated with fewer accounts and with expectations of economic growth % change, loan accounts per 1,000 adults, 2008–09 % change, loan accounts per 1,000 adults, 2008–09 Higher Higher Lower Lower Fewer Greater Low High Number of loan accounts per 1,000 adults* Expected GDP ** Source: Financial Access database. * Correlation controls for expected GDP in 2009. The relationship is statistically significant at the 5 percent level. ** Correlation controls for number of outstanding loans per 1,000 adults in commercial banks. The relationship is statistically significant at the 5 percent level. The differences in median changes in commercial supply as credit quality deteriorates. Increase in loan bank loan volume (as a percentage of GDP) show less penetration is larger for economies with a smaller variation across economies than median changes in number of outstanding loans to start with, indicat- the number of loans. Loan volume as a percentage of ing that even after controlling for expected GDP—a GDP dropped in all regions. Europe and Central Asia, proxy for macroeconomic stability—access to credit heavily affected by the financial crisis, suffered a sharp continues to expand. The implications of these results decline in loan volume, with all the economies in the are twofold. First, similar to deposit services, there is region for which data are available experiencing drops evidence that access to financial services is improving. in loans-to-GDP ratios ranging between 19 percent Second, macroeconomic stability is fundamental for and 52 percent. The hardest hit country in the region access to credit services (figure 1.7). is Tajikistan, where loans declined from 18 percent of Macroeconomic factors, physical GDP to less than 9 percent. Even in Belarus, where the infrastructure, and the structure of financial decline seems more modest, the loans-to-GDP ratio markets are correlated with loan penetration fell from 47 percent to 38 percent. level Macroeconomic stability and economic growth are critical for the expansion of credit Cross-country analysis using the data on the level of credit indicators in Financial Access 2010 is broadly What factors are associated with changes in credit ser- consistent with earlier research.14 Loan penetration, vices in 2009? Economies with higher expected GDP measured by the number of loan accounts per 1,000 levels are more likely to experience an increase in the adults, is positively associated with GDP per capita; number of loans per 1,000 adults.13 This also means population density; branch penetration; physical in- that economies where macroeconomic expectations frastructure indicators, such as phone lines per capita; are negative are more likely to experience decreases in and financial infrastructure, such as credit information loan numbers as demand shrinks and banks tighten and creditor rights. F I N A N C I A L A CC E S S 2 0 1 0 11 The link between loan penetration and banking sector PHYSICAL OUTREACH concentration is negative, indicating that more com- Physical outreach of the financial system petitive banking markets have higher levels of credit expanded in  access. Better creditor rights and comprehensive credit information systems are associated with greater access Global retail networks, consisting of financial institu- to financial services. There is also a positive link be- tion branches, ATMs, and POS terminals, expanded tween the existence of explicit deposit insurance and last year. In 2009 the world on average added about loan penetration. Similar to the effect of credit rights one bank branch, five ATMs, and 167 POS terminals on deposits, this indicates that to improve access to per 100,000 adults.16 This growth was not universal, financial services, a favorable business climate that however. The number of bank branches decreased in supports both deposit and loan services is essential. 43 percent of economies, about half of which are high- Sustainable improvement in access to credit is possible income and Eastern European economies. The number only if sustainable financial institutions are able to ef- of ATMs decreased in 16 out of 104 economies, and the fectively manage both the asset and liability sides of number of POS terminals decreased in 13 out of 77. their balance sheets. Growth in the retail network varied across regions and Banks versus nonbanks in access to credit services income groups. Low-income countries show the highest rates of growth in the number of bank branches, ATMs, Credit services are typically less regulated than deposit and POS terminals, which is another sign of improved services, with unregulated credit grantors providing a access to financial services. Africa, South Asia, and the substantial but often unaccounted-for portion of the Middle East, the regions with the lowest levels of retail credit volume in many economies. As a result, it is network outreach, show higher rates of growth in the more difficult to estimate overall number of credit us- number of bank branches and ATMs (figure 1.8).17 ers than the number of depositors. FIGURE 1.8 Retail networks grew fastest in low-income countries Comparison of the data provided by regulators on and in regions with limited retail network coverage loans granted by banks and nonbanks is difficult for % change in the number of commercial bank branches, ATMs, and POS terminals, 2008–09 the same reasons highlighted earlier with regard to deposit services. The subset of economies with com- Low-income parable data on the number of loans includes only 19 Middle-income economies.15 The numbers are even smaller for spe- Commercial bank branches cialized state financial institutions and microfinance High-income ATMs POS terminals institutions: 15 and 7 economies, respectively. In all cases, average percentage change in the number of High-Income OECD loans is not statistically significantly different from Latin America & Caribbean zero, similar to commercial banks. Europe & Central Asia East Asia & Pacific Sub-Saharan Africa Middle East & North Africa South Asia 0 10 20 30 40 50 % Source: Financial Access database. 12 F I N A N C I A L A CC E S S 2 0 1 0 FIGURE 1.9 Bank branches increased most in less developed networks and where new banks entered the market % change, commercial bank branches per 100,000 adults, 2008–09 % change, commercial bank branches per 100,000 adults, 2008–09 Higher Higher Lower Lower Fewer Greater Low High Number of commercial bank branches % change, number of commercial banks, 2008–09 ** per 100,000 adults, 2008* Source: Financial Access database. * Correlation controls for number of commercial banks in 2008. The relationship is statistically significant at the 5 percent level. ** Correlation controls for number of commercial bank branches per 100,000 adults in 2008. The relationship is statistically significant at the 5 percent level. The growth in low-income countries starts from a low outreach (figure 1.9). This relationship is particularly base, especially for ATM and POS numbers, and the strong in cases of POS terminal growth. increase in coverage is less pronounced. For example, a 27 percent increase in the number of ATMs in Malaysia The expected rate of economic growth and the change translates into an increase in coverage by more than 10 in the number of banks are strongly correlated with the ATMs per 100,000 adults, but an equivalent percent- change in the number of bank branches and ATMs. age change in Kenya adds only 1.6 ATMs per 100,000 This indicates that the entry of new institutions may adults. At the extreme, Burundi doubled the number of significantly improve geographical outreach of the sys- ATMs but still has only about 0.08 ATMs per 100,000 tem. Of course this also means that when banks close, adults—a total of four ATMs in the entire country. Less branches close, too. Economies experiencing a decrease dramatic examples are Syria (with 366 ATMs) and Ma- in economic growth as a result of the financial crisis are lawi (with 203 ATMs)—both doubled the number of also the ones showing large decreases in the number ATMs, resulting in coverage of 2.6 ATMs per 100,000 of bank branches. The number of bank branches de- adults. Overall, patterns of retail network outreach are creased by 218, or 0.54 per 100,000 adults, in Ukraine; broadly unchanged.18 292, or 0.24 per 100,000 adults, in the Russian Federa- tion; and 41, or 3.5 per 100,000 adults, in Estonia. More banks and higher expected economic growth are associated with more retail New technologies enable expansion in locations outreach through nonbranch retail locations Overall, the growth rate in the number of bank branch- Despite the fast growth, the numbers of ATM and POS es, ATMs, and POS terminals in 2009 was negatively networks remain small relative to branch networks correlated with income levels. Poorer economies add- in low- and middle-income countries (figure 1.10). ed branches, ATMs, and POS terminals at a faster rate. In 2009 the average number of ATMs exceeded the For the most part, this meant that the economies with number of bank branches in low-income countries for less developed retail networks were able to improve the first time, but just barely. There are two ATMs per F I N A N C I A L A CC E S S 2 0 1 0 13 bank branch in middle-income countries and three medium of exchange for retail transactions in most per bank branch in high-income countries. In South economies, cash-in-cash-out points, whether in the Asia the ratio is the lowest—on average there is one form of branches, ATMs, or POS terminals allowing ATM for two bank branches. It is important to note cash-back, are essential elements of financial access. that a greater number of ATMs does not automatically translate into better access. Lack of interoperability in Banks versus nonbanks the system, for example, requiring each bank to build its own ATM network, raises overall cost.19 Worldwide, commercial banks have the largest branch network, representing more than two-thirds As new technologies evolve, the trends in the use of of all branches. Cooperatives are the second largest ATMs and POS terminals are changing. Data from the with 23 percent of branches worldwide (figure 1.11). Financial Access 2010 survey show that the number In 60 percent of economies with available data (54 of ATMs relative to the number of branches slightly out of 90), nonbanks had less than half the number declined in high-income countries. At the same time, of branches of commercial banks. According to the the number of POS terminals increased, reflecting a Financial Access 2010 data, the number of coopera- growing reliance on noncash payments. A greater use tive branches exceeds the number of bank branches of electronic transactions through Internet and cell in only a few countries, namely Austria, Burundi, phones may also reduce the need for ATMs going Germany, Hungary, Korea, and Spain. Figure 1.11 forward. For now, though, as cash remains the main likely underestimates the size of the nonbank branch network because of data limitations for nonbanks, FIGURE 1.10 though this year’s survey indicates improvements in a Low- and middle-income countries have fewer ATMs and number of economies on data availability. smaller POS networks in relation to the number of branches Number of ATMs per bank branch, 2009–10 Commercial banks mainly target urban areas. Most 2009 2010 bank branches are located in urban areas, representing Low-income 88 percent of all financial institutions in urban areas. Middle-income On average, only 26 percent of all bank branches are High-income in rural areas, compared with 45 percent for coopera- tives, 38 percent for specialized state financial insti- High-Income OECD South Asia FIGURE 1.11 Middle East & North Africa Commercial banks operate two-thirds of all bank branches Sub-Saharan Africa % of total branches by type of institution Europe & Central Asia Other 4% East Asia & Pacific Microfinance institutions 2% Specialized state financial institutions 5% Latin America & Caribbean 0 1 2 3 Number of POS terminals per bank branch, 2009–10 Commercial Cooperatives Low-income banks 23% 66% Middle-income High-income 1 20 40 60 80 Source: Financial Access database. Source: Financial Access database. 14 F I N A N C I A L A CC E S S 2 0 1 0 tutions, and 42 percent for microfinance institutions NOTES (figure 1.12). Even though a smaller share of commer- cial bank branches is located in rural areas, they still 1. Collins et al. (2009). provide the bulk of rural coverage. 2. For example, Beck, Demirgüç-Kunt, and Levine (2007), using cross-country data, find a positive relationship between finan- cial depth and the change in the income share of the poorest. Data limitations discussed earlier do not allow for a They also report evidence for finance reducing inequality. An ideal experiment in analyzing the impact of reducing the in- robust analysis of changes in bank versus nonbank equalities in household access to finance on poverty would re- branch networks. For a small subset of economies with quire household-level panel data collected over a period, which comparable data for banks and nonbanks (61 econo- is yet unavailable. 3. For details of the methodology, see the Methodology section mies), there is no statistically significant difference in and Beck, Demirgüç-Kunt, and Martinez Peria (2007). See the growth rate of bank and nonbank branches. Ardic, Heimann, and Mylenko (forthcoming) for estimation results. Also see Honohan (2008) for the difficulties involved. FIGURE 1.12 Household survey data on access to financial services comes from recent Living Standard Measurement Surveys (various Nonbanks are more focused on rural areas… years) where available, as well as regional sources: for the % of branches in urban and rural areas European Union, the European Commission’s Eurobarometer, Rural Urban branches branches Special Barometer 260 (2007); for Africa, FinMark Trust’s FinScope; for Latin America, Tejerina and Westley (2007) and 26% the MECOVI database and Barr et al. (2007); and Nenova et al. Commercial banks (2009). These data are referenced and expanded upon in Claes- sens (2006), Honohan (2008), Gasparini et al. (2005), and Beck, 38% Demirgüç-Kunt, and Martinez Peria (2007). Note that predic- Specialized state financial institutions tions may not perform well in the high end and low end of the distribution. 42% 4. See Financial Access 2009 for a discussion and literature re- Microfinance institutions view on various approaches to measurement of financial access. 5. Expected growth in real per capita GDP. Source: IMF (2010). 45% 6. The calculations are done for 97 economies for which data Cooperatives are available in both the Financial Access 2009 and 2010 databases. For example, China is not among these economies …but commercial banks are still the most prevalent because Chinese data are not available in the Financial Access financial institution in rural areas 2009 database. % of rural branches by type of institution 7. Access to deposit and credit services in this report is measured by the number of deposit accounts per 1,000 adults and the Other 1% number of outstanding loans per 1,000 adults, respectively. The Microfinance institutions 3% report defines an expansion in financial access as more individ- Specialized state financial institutions 5% uals and firms using more financial services and products. An Cooperatives 15% increase in the number of accounts could be due to more indi- viduals/firms opening accounts or to the same or even a smaller number of account holders opening more accounts. The data do not allow one to distinguish between these two dimensions because of lack of information on the number of unique deposit Commercial account holders. See Kendall, Mylenko, and Ponce (2010) for banks further details. Reported statistics are calculated for a subset of 78% economies with comparable data in 2009 and 2010, excluding economies with data inconsistencies resulting from institutional reclassifications or improved data availability. Source: Financial Access database. F I N A N C I A L A CC E S S 2 0 1 0 15 8. Source of forecasts: IMF (2010). Expected real growth is an in- dicator variable for positive real per capita GDP growth in 2010. A number of other macro and policy environment variables were tested and showed weak correlations after controlling for income per capita. See Ardic, Heimann, and Mylenko (forth- coming) for estimation results and further details. 9. For a comprehensive account of the literature, see Demirgüç- Kunt, Beck, and Honohan (2008); for recent analysis see Kend- all, Mylenko, and Ponce (2010). 10. The strength of legal rights for borrowers may also proxy for more general legal protections in the system, including those of depositors’ rights. 11. See, for example, Demirgüç-Kunt and Huizinga (1999). Note also that a higher degree of competition and lower concentra- tion are not necessarily the same; concentration is only one dimension of competition and hence used as a proxy for com- petition. 12. Source: Financial Access database. Figures are calculated for those economies for which data are available for the two con- secutive years in the database. For example, China, Japan, and the United States were excluded in calculations because of a lack of data on the number of outstanding loans. 13. Source of expected GDP: IMF (2010). See Ardic, Heimann, and Mylenko (forthcoming) for estimation results and further details. 14. See Financial Access 2009 or Kendall, Mylenko, and Ponce (2010). 15. The subset excludes economies with structural data breaks be- cause of substantial institutional reclassifications or additional data provided in 2010 that was not available in Financial Ac- cess 2009. 16. Estimates exclude China because of lack of data on the number of branches, ATMs, and POS terminals. The POS estimate is based on a smaller number of economies. 17. A smaller number of observations is available for POS termi- nals, making regional comparison difficult. 18. This analysis does not tell whether the new branches, ATMs, and POS terminals are in locations where they did not exist earlier. Ideally, to measure the outreach of the financial system, one would use data on the geographic location of these new branches, ATMs, and POS terminals. 19. See, for example, Saloner and Shepard (1995) and Prager (1999). 16 F I N A N C I A L A CC E S S 2 0 1 0 F I N A N C I A L I N C LU S I O N M A N D AT E S FIGURE 2.1 A broad array of actions can contribute to increasing In most economies regulators are responsible for at least financial inclusion, from establishing a credit facility one topic related to financial inclusion for indigenous farmers in rural areas to introducing Topics: broad consumer protection legislation. Some actions All 22 economies Consumer protection 6 topics are more narrowly focused on regulators’ traditional Financial literacy Any Regulation of microfinance roles of regulation and supervision, while others are 5 topics 39 economies Savings promotion more promotional in nature. A number of govern- SME finance promotion Any ment agencies are usually involved in efforts to deepen 50 economies Rural finance promotion 4 topics financial inclusion, each with its own mandate. Any 62 economies 3 topics Historically, the main role of the financial regulator Any 86 economies 2 topics has been to ensure the stability of the financial system, focusing on regulation and supervision for the safety Any 106 economies 1 topic and soundness of financial institutions. With many 14 economies embracing financial inclusion as a reform None economies objective and putting in place programs to expand Source: Financial Access database. financial access, some regulators are playing a more promotional role as well. However, recent financial In 88 percent of economies, regulators responded that crises underscored the dilemma of choice between at least one element of financial inclusion comes under encouraging financial sector growth, especially credit, their responsibility, 71 percent stated that they have and maintaining the stability of the financial system. at least two topics covered, and about half had three Several important questions arise. To what extent, if topics (figure 2.1). In 18 percent of the economies, all at all, should financial regulators be tasked to improve these elements of financial inclusion are within the fi- access to financial services? Are the goals of financial nancial regulator’s mandate. sector stability and financial inclusion compatible? Which government agency should be responsible for Clearly, at least some aspects of the financial inclusion implementing financial inclusion reforms? agenda are under the purview of the financial regu- lators in most economies. But the focus is different Answering all these questions is beyond the scope of in high-income countries versus low- and middle- this report. Instead, Financial Access 2010 aims to in- income countries. In high-income countries, where fi- form the debate by presenting the results of the survey nancial systems already cover most of the population, of financial regulators on their role in financial inclu- regulators tend to focus on consumer protection and sion reform and the resources allocated to it. financial literacy. In low- and middle-income coun- tries, the agenda is much broader and includes pro- The Financial Access 2010 survey asked financial motion of financial access, in addition to consumer regulators which of the following topics relevant for protection and financial literacy. a financial inclusion agenda were under the pur- view of their agency: consumer protection, financial capability,1 regulation of microfinance, promotion of savings, promotion of access to finance for SMEs, and promotion of rural finance.2 F I N A N C I A L A CC E S S 2 0 1 0 17 Which areas of financial inclusion fall under FIGURE 2.3 the responsibility of the financial regulator? Where are regulators responsible for consumer protection and financial literacy? Consumer protection and financial literacy are the % of economies two areas most frequently reported to be under the Consumer Financial 45 protection literacy financial regulator’s set of responsibilities. Sixty-eight Middle East & North Africa 45 50 percent and 58 percent of regulators, respectively, re- Latin America & Caribbean 73 ported that these areas are within their mandate (fig- 67 East Asia & Pacific 67 ure 2.2). Often consumer protection falls within the High-Income OECD 68 56 broader mandate of ensuring soundness and stability Europe & Central Asia 77 55 of the financial system through business regulation 81 Sub-Saharan Africa and supervision. Consumer protection and financial 47 100 South Asia literacy are equally relevant in both developed and de- 100 veloping markets, as available products become more Low-income 85 48 complex and affect more people. 63 Middle-income 63 High-income 64 Financial education is closely related to consumer pro- 56 tection in that it also aims to protect the consumer from Source: Financial Access database. abusive practices, but from a different angle. Financial literacy refers to the need to inform the public about the financial regulator undertakes on a regular basis for the basics of financial services and ensure individuals’ other topical areas. Promoting financial capability, on ability to make informed judgments and effective deci- the other hand, requires different skill sets and opera- sions about the use and management of their finances. tions. Consequently, although many economies report interventions in financial capability as part of the regu- However, financial capability has different operational lator’s priorities, there is a great deal of diversity among implications for the financial regulator than consumer the types of activities carried out. Approximately half protection. Consumer protection is often implemented of the economies in Financial Access 2010 report hav- through market conduct regulation and supervision as ing a team allocated to financial literacy, although in part of traditional regulatory and supervisory activities many cases, such teams are not allocated full-time to advancing this topic. In Sweden, for example, the fi- FIGURE 2.2 nancial education team is part of the communications Which areas of financial inclusion are most frequently the regulators’ responsibility? team within the financial regulator. In fact, only a third of the teams are stand-alone financial literacy units. % of economies % of economies where Agency where Agency Seldom is the full design and implementation of finan- Financial inclusion topic has a dedicated team is responsible cial literacy programs conducted entirely by the finan- Consumer protection 51 68 cial regulator. Peru is one of the few economies where Financial literacy 48 58 the regulator is fully committed to financial education programs. Within the framework of Peru’s financial Regulation of microfinance 43 54 education plan, the Division of Products and Customer Savings promotion 18 39 Care has implemented a wide array of activities, from SME finance promotion 33 44 information campaigns to education of schoolteachers and creation of virtual classrooms on its Web site. The Rural finance promotion 29 40 United Kingdom stands out as well with an entire divi- Source: Financial Access database. sion allocated to financial capability. 18 F I N A N C I A L A CC E S S 2 0 1 0 FIGURE 2.4 Regulation of microfinance, promotion of savings, and Developing countries are more likely to focus on a broad range of financial access issues improvement of access to finance for SMEs and in ru- ral areas are topics that are closely linked to develop- % of economies where financial regulator Developing countries is responsible for: High-income countries ing countries’ policy objectives. Of these, regulation of Consumer protection 71 microfinance is the next most frequent item after con- 64 sumer protection on a financial regulator’s list. As the Financial literacy 58 56 microfinance industry has matured, professionalized, Regulation of microfinance 65 and experienced sustained growth, it is increasingly 26 Savings promotion 48 becoming an important part of the financial sector in 15 many economies. In 65 percent of developing coun- SME finance promotion 52 18 tries, the main financial regulator reported regulation Rural finance promotion 51 of microfinance to be within its mandate. 12 Source: Financial Access database. Promotion of savings, SME finance, and rural finance are more frequently reported as areas of responsibility Financial literacy programs are more commonly of the financial regulator in developing countries than cross-cutting initiatives, spanning several depart- in high-income countries. About half of regulators in ments within the financial regulator, as in Brazil, or developing countries say that these issues are part of several government agencies, including ministries of their agenda, compared with less than 20 percent in finance, superintendents, or deposit insurance agen- high-income countries. cies, as in El Salvador. The role of the regulator can therefore be one of coordination, consultation with East Asia and the Pacific, South Asia, and Sub-Saharan private partners and financial institutions, or, less fre- Africa place the most financial inclusion topics under quently, implementation. Regulators in low-income the responsibility of the financial regulator (figure countries, where the need is probably the greatest, are 2.5). This is also true for savings, rural finance, and generally less likely to include financial literacy as one SME finance promotion. In East and South Asia, the of their areas of responsibility (figure 2.3). role of financial regulators is more focused on promo- tion of economic growth. In some economies such as Promotion activities and regulation of microfinance are the priority for regulators FIGURE 2.5 in developing countries South Asian economies give regulators a greater mandate over financial inclusion topics Regulators in low- and middle-income countries, Average share of topics under the mandate of financial regulators (%) where financial access remains limited, are more likely High-Income OECD 34 than high-income countries to have the responsibility for promotional activities linked to financial inclusion, Latin America & Caribbean 39 such as creating incentives for savings or outreach to Middle East & North Africa 40 rural areas. These activities are in addition to roles Europe & Central Asia 41 found among high-income countries of putting in East Asia & Pacific 65 place measures for consumer protection and financial capability (figure 2.4). Sub-Saharan Africa 71 South Asia 92 Source: Financial Access database. F I N A N C I A L A CC E S S 2 0 1 0 19 FIGURE 2.7 the Philippines, entire units are allocated to financial Financial inclusion is gaining ground inclusion, and financial inclusion is at the core of their in the policy arena 15 agenda. Other central banks take financial inclusion Number of economies with a strategy document one step further and formally recognize it in their charters. Bank Negara Malaysia’s role in promoting inclusive financial systems is explicitly articulated in 10 the legislation as one of the primary functions of the central bank. 5 What resources are allocated to implementing the financial inclusion agenda? More often than not, financial regulators are mandated by their governments to tackle one or more aspects of 2000 2005 2009 financial inclusion. To implement this broad agenda, Source: Financial Access database. the regulator requires staff and resources. Financial Access 2010 surveyed regulators on whether they had Strategy document for financial inclusion specific teams, units, or departments allocated to each of the financial inclusion topics they had under their One approach to the implementation of financial ac- purview. Figure 2.6 summarizes this information. It cess reforms is through a comprehensive financial appears that the commitment to reform is not always inclusion strategy. Forty-five percent of economies in matched by allocated staff. For example, for savings Financial Access 2010 report having a strategy docu- promotion and rural finance promotion, for which 49 ment for the promotion of financial inclusion, with 91 and 52 economies, respectively, reported these areas as percent of them dating from 2004 or later (figure 2.7). being under their responsibility, only 47 and 71 percent, Not surprisingly, regulators with a financial inclusion respectively, had teams assigned for those areas. Low- strategy are more likely to have more financial inclu- income countries have more resources allocated to the sion topics under their purview and more resources work on financial inclusion, but given the breadth of and staff allocated to working on these matters. They their agenda, they also have a larger resource gap. also have a relatively lower resource gap (figure 2.8). FIGURE 2.6 FIGURE 2.8 Resource gap is greater in low-income Strategic approach translates into a broader agenda countries and more resources Average number of topics Average number of topics 4.6 Topics mandated 4.3 Topics mandated 2.7 2.0 1.9 3.5 Topics with dedicated teams 3.3 Topics with dedicated teams 2.1 1.3 1.2 Economies Economies with High- Middle- Low- with no strategy document income income income strategy document Source: Financial Access database. Source: Financial Access database. 20 F I N A N C I A L A CC E S S 2 0 1 0 FIGURE 2.9 Financial inclusion reforms What do economies reform? % of economies that reformed by area of reform What were the main areas of reform in financial in- clusion in 2009? Reported reforms vary greatly, from Consumer protection 56 setting up task forces and working groups to drafting Revising “Know Your Customer“ requirements 48 strategies or legal text, to enacting them into legislation SME finance promotion 47 and to final implementation and enforcement. Despite this great variance in the nature of reforms, reforms Microfinance 45 reported were weighted equally for the purposes of Rural finance promotion 42 analysis and comparison in Financial Access 2010. Financial literacy 40 Enabling branchless banking 36 Consumer protection is the most prevalent area of re- form across all regions (figure 2.9). Sixty-five econo- Over-indebtedness 32 mies reported reforms in this area. It is also the only Government to person transfers (G2P) 24 reform area in which high-income countries lead, Basic accounts 17 highlighting the importance of consumer protection beyond the specific issue of access, especially in the Source: Financial Access database. past year when financial supervisors were implement- ing reforms to deal with the effects of the global finan- ing to tackle this issue by drafting strategy and national cial crisis and to ensure the soundness and stability of programs to be implemented at a later stage. Some the financial sector. The most common reform within regulators post a variety of learning materials on their consumer protection is disclosure requirements, cited Web sites. In Peru and Lesotho, regulators chose to do by 10 economies. Next are reforms linked to putting in broad advertising campaigns informing the population place recourse mechanisms, complaint handling, and at large of the benefits and risks of financial products. dispute resolution systems, reported by nine econo- mies. Three countries—Austria, New Zealand, and Thirty-eight economies report specific reforms related Australia—list the extension of deposit insurance as to consumer overindebtedness in 2009. Overindebt- a reform under consumer protection; another three edness is the result of both demand and supply forces. countries—the Czech Republic, Finland, and Alge- Reducing the number of consumers who borrow be- ria—focus their reform energies on fraud protection. yond their means can partly be addressed by enhanced Many economies are in the early stages of preparing disclosure requirements and consumer education. strategy documents on consumer protection reform. On the supply side, regulators may choose to require stricter risk management and to improve transparen- For consumer protection to be effective, clients need to cy in credit markets. Survey respondents indicate that understand the basic characteristics and functions of the most frequent measure taken to combat excessive the products offered to them. Yet according to the Fi- lending and overindebtedness is related to credit bu- nancial Access 2010 survey, financial literacy is a much reaus and credit registries. More than 15 economies less common area of reform. Only 40 percent of econ- report modernizing or establishing credit bureaus as omies enacted reforms in this area last year. Reforms a way to monitor and prevent excessive lending. Some range from creating or updating financial education economies, such as Portugal, have passed legislation school programs, as in Argentina and New Zealand, to to make credit bureau consultation mandatory; other establishing financial literacy weeks and launching fi- economies, such as Rwanda, now require financial in- nancial learning centers. Some economies are just start- stitutions to report information to the credit bureau. F I N A N C I A L A CC E S S 2 0 1 0 21 FIGURE 2.11 Panama, Syria, and Liberia report establishing quan- Where are economies reforming the most? titative restrictions limiting loan sizes with respect to Average number of reforms, 2008–09 a borrower’s income. The practice of quantitative re- strictions on consumer credit was reviewed in Finan- High-Income OECD 2.4 cial Access 2009. To date, there is no robust assessment Europe & Central Asia 3.3 of the effectiveness of this measure, although experi- Middle East & North Africa 4.2 ence with other quantitative caps indicates that these Latin America & Caribbean 4.5 policies are hard to enforce and are rarely effective. Sub-Saharan Africa 4.8 In recent years many economies have put in place East Asia & Pacific 4.9 strict “know your customer” (KYC) requirements. South Asia 6.2 These rules are designed to ensure that the financial system is not used for illicit purposes, such as money Source: Financial Access database. laundering and terrorist financing. These rules often have the unintended consequence of limiting access relaxed its KYC requirements for opening electronic to financial services for the poor, who may not have savings accounts; and Ghana reduced its requirements the required documentation available to open an ac- for low-value transactions (figure 2.10). count.3 In the Financial Access 2010 survey, 48 per- cent of economies report revising their KYC require- In times of economic slowdown, governments tend ments. However, few economies actually did so with to focus on policies that can help create jobs. Reforms a financial inclusion focus. In most cases, countries’ aimed at improving access to finance for SMEs consti- efforts have been geared toward updating, improving, tute the third most popular area of reform after con- or amending their anti-money-laundering/combat- sumer protection and KYC requirements. Forty-seven ing the financing of terrorism legislations and proce- percent of economies indicate that they implemented dures. But three economies reformed in this area with reforms in this area in 2009. Fifteen of those econo- financial access concerns in mind, to achieve higher mies focused on the set-up or expansion of credit participation rates: Afghanistan reformed with regard guarantee schemes. Other countries, such as Oman to branchless banking KYC requirements; Colombia and Zimbabwe, have taken softer approaches, includ- ing encouraging banks to increase their lending to FIGURE 2.10 the SME sector. Some regulators, such as those in Sri Many reformed KYC regulations Lanka, require banks to direct a designated minimum but few reforms improved financial access amount of their portfolios to SMEs. Number of economies that reformed 55 KYC requirements Across regions, South Asia and East Asia and the Pa- cific introduced the most reforms, followed by Sub- Saharan Africa. Europe and Central Asia and high-in- come countries had fewer reforms in financial access (figure 2.11). Not surprisingly, regions that include financial access in their strategies and mandate their financial regulators to carry out such agendas are also 3 KYC requirements for improving access the regions that reformed the most. Pakistan and India lead the way for South Asia with six and seven differ- Source: Financial Access database. ent areas of reform, respectively. The three economies 22 F I N A N C I A L A CC E S S 2 0 1 0 FIGURE 2.12 Reform priorities differ by income group NOTES 1. Throughout the report, financial literacy, financial education, Extent of reform in: and financial capability are used interchangeably to maintain Credit promotion (0–1) a broader focus and facilitate cross-country comparison of re- Low-income .44 .19 .19 Savings promotion (0–1) forms. Consumer protection (0–1) 2. These broad categories of topics relevant for the financial inclu- Middle-income .47 .29 .43 sion agenda were identified for the purposes of the Financial Access 2010 survey to enable cross-country comparison. This list does not include the full universe of issues covered by the High-income .37 .45 .75 concept of financial inclusion. The focus on these topics by a financial regulator does not necessarily imply an explicit finan- cial inclusion mandate but may reflect the importance of these 0.0 0.5 1.0 1.5 2.0 2.5 3.0 issues for implementing financial stability and macroeconomic policy mandates. For example, improvements in financial lit- No reforms eracy and consumer protection are expected to improve loan Broad range of reforms performance, and SME dependence on bank financing can be an important transmission channel for monetary policy. Source: Financial Access database. 3. See Genesis Analytics (2008) and Isern and Porteous (2005). reporting the highest number of reforms, with 10 dif- ferent areas of reform each, are the Philippines, Ma- laysia, and Nigeria. Once again, all their central banks have special access to finance units. Overall, low-income countries, where needs are the greatest, reformed more actively and focused more on promoting deposit and credit services than high- income countries (figure 2.12). High-income countries, where access to basic financial services is nearly univer- sal, focused more on enhancing consumer protection. F I N A N C I A L A CC E S S 2 0 1 0 23 CO N S U M E R P R OT E C T I O N Consumer protection and financial literacy can con- shifted the debate toward the need to empower finan- tribute to improved efficiency, transparency, competi- cial service users, to inform them, and to give them tion, and access in retail financial markets by reducing tools to protect their rights. Present-day financial information asymmetries and power imbalances be- consumer protection frameworks in most economies tween providers and users of financial services.1 When reflect this approach and rely on fairness and transpar- customers are better informed about the terms and ency as their core principles. conditions of financial services, they can shop around, thereby stimulating competition. Informed clients can To inform the ongoing debate on the state of financial choose products that best fit their needs and therefore consumer protection, the Financial Access 2010 survey incentivize competing financial service providers to asked financial regulators around the world about the design better products. Knowing that their rights are status of financial consumer protection in their juris- protected may bring in new customers, especially in dictions. Empirical analysis of the relationship between markets where financial systems are not trusted for financial consumer protection, access to financial ser- historical reasons. vices, and stability is limited, in large part because of a lack of consistent data on outcomes as well as policies. The recent financial crisis highlighted the importance Statistical analysis conducted for this report indicates of effective consumer protection and adequate levels a strong correlation between comprehensiveness of of financial literacy for the sustainability of the entire consumer protection regulations and the overall level financial system, particularly in an environment of of economic development.5 Once regressions control increasingly complex financial products and services. for income per capita, no stable statistically significant Lack of effective disclosure and deceptive advertising correlations between various aspects of consumer on the part of providers and failure to understand fi- protection regulation and access outcomes are found. nancial products on the part of consumers contributed Data limitations and endogeneity issues are inherent to the collapse of the subprime mortgage market in the in a cross-country regression framework and make it United States. But the problem is not limited to devel- impossible to draw conclusions at this stage. Further oped markets with highly complex products. Bosnia research at the micro level is essential to understand- and Herzegovina, India, and Morocco saw indebted- ing the impact of various consumer protection poli- ness rise to unsustainable levels at times among mi- cies. At the cross-country level, consistent data collec- crofinance borrowers in 2009.2 Policy makers around tion on outcomes and policies over time, including on the world have responded by introducing financial lit- effective regulation rather than just legislation on the eracy programs and strengthening financial consumer books, should shed light on the long-term relationship protection. among consumer protection, access, and stability. The need for consumer protection in the financial in- Financial Access 2010 presents a first-ever overview of dustry is not a new concept. Until recently, though, the a range of consumer protection policies in more than focus has been on credit transactions, with the basic 140 economies and builds a basis for future research. objective of limiting “harmful” borrowing.3 Through- It is a first step to understanding the existing land- out history debt forgiveness, interest rate caps, and scape in consumer protection by answering some of outright bans on usury were used to prevent abuse the following questions: Do economies have financial by lenders. This paternalistic approach proved to be consumer protection legislation in place? What are the unsustainable and difficult to enforce, with consistent powers of agencies that are responsible for consumer evidence of violations of the rules over time.4 Funda- protection to enforce regulations? And what forms of mental changes in thinking in the early 20th century recourse exist?6 24 F I N A N C I A L A CC E S S 2 0 1 0 FIGURE 3.1 LEGAL FRAMEWORK Most economies have laws and regulations Most economies have consumer protection addressing financial consumer protection legislation in place, and reforms are Number of economies widespread 77 77 More than 80 percent of economies (118) responding 67 to the Financial Access 2010 survey have laws and reg- ulations addressing at least some aspects of financial 42 consumer protection. This topic is at the intersection of consumer protection and financial services regu- lation. Not surprisingly, relevant legal provisions are most often found in broad consumer protection legis- lation and in financial sector regulations (figure 3.1). General Consumer Consumer Other legal Sixty-seven economies are a step further and report consumer protection law protection framework for protection law referencing under financial consumer having issued consumer protection legislation with financial services services law protection specific references to financial services. Source: Financial Access database. Financial consumer protection provisions are diffused ance scheme, and credit bureau regulation. Moldova in multiple laws. Of the 118 economies that have some has plans to amend its Law on Consumer Protection type of consumer protection legislation, 48 percent to include specific provisions on financial services. have both consumer protection legislation and regu- lations under the financial sector legal framework. In Other economies enhanced existing frameworks and addition, other legal acts on payment systems, credit mechanisms. Economies such as Portugal and Bangla- bureaus, insurance, pensions, and securities may in- desh introduced restrictions on rates and fees. France clude financial consumer protection provisions. These passed an ordinance establishing a new single regula- laws often contain conflicting provisions and create tor for the financial services and insurance industries. complex oversight and regulatory structures, posing The United States and United Kingdom are both mov- challenges to implementation.7 ing to create a consolidated financial consumer pro- tection agency. Most of the financial consumer protection legisla- tion were passed in the previous two decades. Rapid An effective financial consumer protection framework expansion of retail financial services and increasing covers three broad dimensions. First, it protects con- complexity of products mean that financial consumer sumers against unfair or deceptive practices by finan- protection legislation is constantly evolving. cial service providers, including in advertising and collections. Second, it improves transparency through As discussed in the previous section, consumer pro- a requirement to disclose full, plain, adequate, and tection was a popular area of reform in 2009. A num- comparable information about prices, terms, and con- ber of economies introduced or are about to introduce ditions of financial products and services. Third, it es- consumer protection legislation for the first time. tablishes a recourse mechanism to address complaints At the time of writing, Madagascar’s parliament was and resolve disputes quickly and inexpensively. What about to adopt a consumer protection law. In Georgia, consumer protection legal provisions are in place in a number of projects are under consideration, includ- economies around the world? ing disclosure rules, development of a deposit insur- F I N A N C I A L A CC E S S 2 0 1 0 25 FIGURE 3.2 FIGURE 3.3 Laws protect consumers in most economies, Few economies have legal protections against but enforcement mechanisms are lacking in many unfair practices specific to financial services Number of economies % of economies 123 115 80 76 82 68 48 50 13 No Abusive Unfair Deceptive Breach of Fair treatment Disclosure Dispute Dedicated unit protections collection selling advertising confidentiality option at opening resolution for consumer practices practices protection Legal protections Source: Financial Access database. Source: Financial Access database. Basic consumer protection requirements are on Broad fair treatment provisions are in place, the books in most economies, but enforcement but they may not address specific issues in the mechanisms are lacking financial service industry Most economies have basic legal and regulatory frame- Among the elements of fair treatment regulations that works for financial consumer protection. In 123 econo- economies have, the most common are provisions re- mies (87 percent), at least some fair treatment provi- stricting deceptive advertising (76 percent) and breach sions are covered by the existing legal and regulatory of client confidentiality (80 percent) (figure 3.3). These framework, including restrictions on deceptive adver- provisions are often part of broader legislation. For tisement, abusive collections, unfair or high-pressure example, client confidentiality is protected by bank selling practices, and breach of client confidentiality. At secrecy provisions in most civil law countries and is least some form of disclosure requirement regarding fi- implied in contractual law in common law countries. nancial products and services is on the books in 115 Restrictions on deceptive advertisement are often part economies (81 percent). A much smaller number of of general commercial law and basic consumer protec- economies—only 82 economies or about 60 percent— tion legislation. have a third-party dispute resolution mechanism, such as an ombudsman or a mediation center. And most But only about half of the economies reporting have important, only two-thirds of the 99 financial regula- provisions restricting unfair and high-pressure selling tors who said that they are responsible for at least some practices and abusive collection practices. These are aspect of financial consumer protection have a desig- important issues, especially given the potential rein- nated unit or team to work on these issues (figure 3.2). forcing link between the two. Customers enticed into borrowing beyond their means are more likely to be the subjects of a collections process. Regulations in high- and upper-middle-income coun- tries are more likely to include restrictions on all four unfair practices surveyed in Financial Access 2010, 26 F I N A N C I A L A CC E S S 2 0 1 0 FIGURE 3.4 with an average of 3.4 out of 4 areas included. Low- Most disclosure requirements focus on opening an account, income countries on average cover only two of the un- and seldom apply to nonbanks fair practices surveyed. % of economies The legal framework should provide sufficient protec- Banks 81 47 tion to ensure fair treatment of financial service cus- tomers. Yet 13 percent of economies reported that their Regulated 73 financial 34 legislation does not include any specific fair treatment institutions Requirement: provisions. And in at least half of the countries, the Unregulated 25 Disclosure upon opening financial legislation does not go beyond restricting deceptive institutions 4 Periodic statement advertising and protecting confidentiality. As many economies review their consumer protection legisla- Source: Financial Access database. tion and consider revisions, fair treatment provisions relating to collections and high-pressure selling prac- ment to disclose information periodically through an tices deserve consideration. account statement. This second type of disclosure is especially important for products for which the cost of Banks are more likely to be subject to disclosure requirements than other financial the product depends on the use—for example, credit institutions, and most disclosure requirements cards and overdrafts. The survey also asked whether apply at the account opening stage the rules apply to banks, other regulated financial in- stitutions, and unregulated financial institutions. Disclosure is the cornerstone of the modern approach to consumer protection, focusing on empowering cus- Two striking results emerge from the survey (figure tomers. At least in theory, informed consumers should 3.4). First, most of the disclosure requirements ap- be able to compare offers, make sound financial deci- ply only to account opening. Eighty-one percent of sions, and demand recourse when wronged. Thus far, economies require commercial banks to disclose in- though, empirical evidence suggests that disclosure formation upon account opening, while only about requirements improve transparency in credit markets half of them require periodic disclosure. The trend is more than the financial decisions of borrowers.8 At the even more pronounced for other types of financial in- same time, there are indications that disclosure is most stitutions. In more than half of the countries, clients effective when financial literacy is high and consumers are not entitled to be updated about the state of their can understand what is being disclosed—for example, financial accounts. The decision on what and how to how the interest rates are calculated.9 Though research disclose to a customer once a product is sold is left up on the most effective forms of disclosure is ongoing, to the financial service provider. there is no question as to whether consumers have the right to know the terms and conditions of the prod- Second, commercial banks are more likely to be sub- ucts and services offered. ject to disclosure requirements than are other financial institutions, and unregulated financial service provid- The Financial Access 2010 survey covers two broad ers are rarely subject to disclosure requirements. The types of disclosure. The first, known as disclosure survey, however, asked regulators to identify whether upon opening, refers to the requirement to notify con- disclosure requirements exist at all, not whether it is sumers in writing of pricing, terms, and conditions the central banks or financial regulators’ responsibil- of a financial product prior to signing an agreement. ity to implement them. It is possible that respondents The second, periodic disclosure, refers to the require- were not aware of regulations affecting unregulated F I N A N C I A L A CC E S S 2 0 1 0 27 institutions. A comprehensive assessment of overall percent of economies require disclosure of rates and financial consumer protection is needed to evalu- fees, and 53 percent require an explanation of how the ate the degree to which disclosure requirements ap- rate is computed. ply to unregulated financial institutions. This finding does confirm the fact that even in economies where Disclosing rates and fees alone may not be sufficient financial regulators are involved in financial consumer to enable customers to make informed decisions.10 To protection matters, they rarely are tasked to focus on facilitate comparison of financial product terms across unregulated financial institutions. institutions, some economies have introduced a stan- dardized disclosure format for general financial prod- Guidelines for disclosure requirements at account opening are focused on rates and fees ucts, such as a one-page “Key Facts” document summa- rizing terms and conditions in a clear and transparent What information must be disclosed upon account manner. Forty-one percent of economies reporting to opening? According to the Financial Access 2010 sur- Financial Access 2010 have such a requirement. vey, disclosure requirements in most economies are focused on quantitative information, such as rates And most important, only 35 percent of economies and fees, and not on explaining to customers how have a requirement to provide information on dispute these rates and fees are calculated (figure 3.5). On the resolution, raising a question as to the effectiveness of deposit side, 65 percent of economies require disclo- such disclosure. sure of annual percentage yield and interest on de- Periodic disclosure guidelines rarely require posit products, while 42 percent require an explana- information on disputing content of the tion of how it is compounded. On the credit side, 66 statements FIGURE 3.5 What information is required to be disclosed in pe- Most disclosure requirements for opening an account riodic statements? According to the Financial Access focus mainly on rates and fees 2010 survey, fewer economies have detailed guidelines % of economies with disclosure requirements for opening an account on the content of periodic statements than disclosure General requirements upon opening. The four most com- Recourse mechanism mon requirements are focused on purely numerical Standardized format Local language information: annual percentage rate (applied during Plain language the period of the statement); interest charged for the Deposit period; fees charged for the period; and outstanding Early withdrawal balance of credit. One-third of economies require fi- Fees & penalties nancial institutions to provide information on how to Minimum balance dispute the accuracy of transactions (figure 3.6). Compounding method Annual percentage yield & interest rate The frequency of periodic disclosure differs across Credit economies. Almost half of the economies reporting Required insurance require some sort of periodic disclosure. Of those Computation method (average balance, interest) economies, 64 percent require that statements be is- Fees APR sued monthly. In 20 percent of economies there is a requirement to issue a statement at least once a year, 30 40 50 60 though the financial service provider may choose to Source: Financial Access database. disclose information more frequently. 28 F I N A N C I A L A CC E S S 2 0 1 0 FIGURE 3.6 of economies regularly post fees and rates for deposit Requirements for periodic statements focus mainly on rates and fees and credit products on the regulators’ Web sites. For % of economies with disclosure requirements for periodic statement example, Bank of Uganda publishes bank charges. General Info on dispute There is no one-size-fits-all solution to the design of a Deposit legal framework for financial consumer protection. It Account balance should reflect the structure of the financial system and Fees the nature of each economy’s overall legal framework. Annual percentage yield But, in all cases, the process of designing an effective Interest earned financial consumer protection framework requires Credit a comprehensive approach and consultation among m balance Outstanding d method Required met hod hod various stakeholders to ensure consistency within laws Date due Compututati ation Computation on method me met et hod o od thod Minimum Fees amount due and regulations. Close coordination is also essential to Fees APR for period develop effective oversight and regulatory structures. Interest charged APR for period INSTITUTIONAL STRUCTURE Transactions Multiple regulators are involved in consumer 30 40 50 60 protection, and financial supervisors are Source: Financial Access database. engaged in a majority of economies Different types of products may need different fre- Reflecting the variation in legal frameworks on con- quencies of disclosure. For example, in Malaysia, loan sumer protection, supervisory and enforcement struc- statements have to be provided to customers at least tures differ among economies. In most cases multiple once a year, whereas for deposit accounts, a statement government agencies are involved in the regulation, su- has to be provided at least once a quarter. In Greece, pervision, and enforcement of laws related to financial monthly statements must be provided to credit card consumer protection. On the one hand, consumer pro- holders only. In Norway, the law specifies that state- tection agencies, competition authorities, ministries of ments must be provided annually, but the institution justice, or ministries of economy may be responsible for is required to provide the customer with a statement implementing broad consumer protection legislation. more frequently if the account has been in use (cred- On the other hand, central banks, bank supervisory ited or debited). As a result, the periodic statement is authorities, securities commissions, and other financial usually provided monthly. service regulators are involved in implementing finan- cial consumer protection regulations that apply to the With modern technology, it is possible to disclose institutions they oversee. Central banks or bank super- statements via the Internet, which helps to reduce the visors are responsible for at least some aspect of finan- cost of compliance with disclosure requirements. It cial consumer protection in 99 economies (70 percent) is important, though, to ensure that customers have reporting to the Financial Access 2010 survey. a choice regarding how they receive their statements, whether on paper or electronically. Consumer protection regulators are more likely to take a functional approach with a focus on products and In addition to requiring disclosure by financial insti- services, regardless of which institutions provide these tutions, regulators themselves increasingly take steps services. A functional approach applies consumer pro- to improve transparency in the markets. A number tection to all financial service providers irrespective F I N A N C I A L A CC E S S 2 0 1 0 29 FIGURE 3.7 Effective implementation also requires assigned staff Agencies responsible for consumer protection often lack a dedicated unit or team and resources in the agency responsible. Yet Financial % of economies Access 2010 finds that this is not always the case. Out Agency has a dedicated unit Agency has responsibility of 99 economies where financial regulators are respon- for consumer protection for consumer protection sible for at least some aspect of consumer protection, South Asia 33 33 68 economies (69 percent) had assigned this work to a Latin America & Caribbean 48 56 specific department or unit (figure 3.7). Most of these Europe & Central Asia 38 67 consumer protection departments and units are rela- tively new. Of the 60 economies that provided their East Asia & Pacific 50 67 units’ date of establishment, 65 percent were created Middle East & North Africa 31 69 after 1999, and 45 percent after 2005. High-Income OECD 55 79 Sub-Saharan Africa 59 A number of countries—31—reported that consumer 85 protection work is assigned to a financial institution Source: Financial Access database. supervision department. In Austria, Botswana, Kenya, the former Yugoslav Republic of Macedonia, and Sri of their institutional type (i.e., bank or nonbank), en- Lanka, consumer protection is part of routine super- suring a level playing field. But consumer protection visory work, with no organizational separation of con- agencies often face a challenge taking on financial con- sumer protection tasks from general supervision. In sumer protection responsibility because they lack both the Philippines, Spain, Brazil, Israel, and Zimbabwe, knowledge of the financial sector and capacity. consumer protection is handled by an allocated team or unit within the banking supervision department. Financial regulators, on the other hand, have a solid un- An alternative approach taken by 13 economies is to derstanding of the financial sector but are empowered create a special department. In the Czech Republic, to implement consumer protection provisions only as the Consumer Protection Department reports directly they relate to the financial institutions they regulate, to the board of the Czech National Bank; in Ecuador not to a broad range of financial service providers. This the department reports directly to the bank superin- approach fragments responsibilities among many regu- tendent; and in the United States the Federal Reserve lators and, more important, excludes unregulated insti- Board has a Division of Consumer and Community tutions, creating distortions in the market.11 To address Affairs, with a staff of 120. this challenge, some economies have created a single Agencies’ powers to enforce consumer protection agency responsible for consumer protection issues for regulations and monitor compliance are limited retail financial services, such as the Financial Consum- er Agency of Canada or the National Credit Regulator What actions can regulators take if financial institu- in South Africa, which is solely responsible for retail tions do not comply with regulations? And how do credit. The United States and United Kingdom are also regulators monitor compliance? Financial Access 2010 moving in this direction following the recent crisis. finds that regulatory powers are often limited. Regula- tors in a little more than half of the economies have Whichever institutional structure is chosen, effective powers to issue warnings to financial institutions or implementation of the law requires that the respon- impose fines and penalties for violation of consumer sibilities of the respective agencies are clearly defined protection regulations, and only about a third are em- and a single entity is assigned to receive and direct powered to issue a public notice of violation, require customer complaints and inquiries.12 providers to refund excess charges, or withdraw a li- 30 F I N A N C I A L A CC E S S 2 0 1 0 FIGURE 3.8 FIGURE 3.9 What enforcement actions can regulators take? What monitoring actions are available to regulators? Require refund of excess charges Mystery shopping Issue public notice of violations Consumer interviews Withdraw licenses to operate Receive complaints stats Withdraw misleading ads Operate complaints hotline Impose fines and penalties Monitor ads/Web sites Issue warnings to financial institution Onsite inspection of financial institutions 30 40 50 60 10 20 30 40 50 60 % of economies % of economies Source: Financial Access database. Source: Financial Access database. cense to operate (figure 3.8). A number of respondents The low number of actions taken indicates that there commented that even though their agency had the are either no violations or no effective monitoring and responsibility to monitor compliance with consumer enforcement mechanisms. The statistics on the num- protection regulations, they were authorized to take ber of complaints in economies with effective moni- action only if the violation of consumer protection toring systems, such as the United Kingdom, where provisions posed a risk to financial stability, signifi- the financial regulator records 3 million complaints cantly limiting the regulator’s ability to step in. per year,14 suggest that violations are likely. But with- out consistent data on the number of complaints re- Credible deterrence is a critical element of successful ceived and the resolution steps taken, it is impossible enforcement. A recent evaluation of consumer credit to assess either the scale of the problem or the effec- interventions in the United Kingdom suggests that tiveness of the reaction. So how do regulators monitor greater publicity for the actions taken and the regula- compliance with consumer protection provisions? tor publicly identifying the offending institutions can increase the deterrent effect.13 So how often do regula- To identify risks to the economy resulting from inad- tors exercise their powers? Surprisingly few economies equate consumer protection, regulators need to com- were able to provide statistics on the number of times plement onsite inspections with routine monitoring of actions were taken against institutions. Twenty-one complaint statistics and advertisements, mystery shop- economies reported the number of times they issued ping, and focus groups with consumers and industry. warnings, out of 85 economies with the authority to do However, Financial Access 2010 survey results indicate so. Of these 21, only half issued more than five warn- that most financial regulators tasked with monitoring ings. Statistics on fines were provided by 22 economies compliance with consumer protection regulations rely out of 79 authorized to impose fines and penalties. Of mainly on onsite inspections as part of a routine fi- these, three economies did not apply any actions in nancial institution examination and rarely use other 2009 and a little more than half of the economies ap- methods (figure 3.9). plied fines to seven or fewer institutions. Among 21 economies, mostly high-income OECD, that had an Monitoring customer complaints and tracking en- authority and provided statistics on more than one ac- forcement actions is an important step in improving tion, the most common actions were requirements to the effectiveness of regulations. Analyzing the trends withdraw advertisements. Only the United Kingdom, in enforcement actions can help regulators adjust ex- Italy, Japan, Lithuania, Nicaragua, and Sierra Leone isting frameworks and improve oversight, as well as report more than one case of issuing a public notice of identify market-wide risks. Financial Access 2010 sug- violation—potentially a very effective tool. gests that thus far only a few economies have put the necessary monitoring mechanisms in place. F I N A N C I A L A CC E S S 2 0 1 0 31 FIGURE 3.10 DISPUTE RESOLUTION MECHANISMS How are disputes resolved? The power imbalance between providers and users of % of economies 24 Mediation service financial services is acute in retail financial transac- tions, especially when they involve low-income indi- 21 19 General ombudsman viduals. A consumer of financial services is unlikely to have the resources to go through the court process to 29 resolve a dispute with a financial institution. Effective 57 Financial ombudsman 25 complaint-handling mechanisms by financial service 30 providers and extrajudicial third-party dispute reso- 11 lution mechanisms are essential parts of a consumer 5 Low- Middle- High- protection system. Yet these mechanisms are often not income income income in place, limiting the effectiveness of the legislation. Source: Financial Access database. Financial institutions are the first line of defense when compared with a quarter of the economies or fewer in it comes to resolving disputes. Not only is complaints other regions. resolution required by fairness provisions in most countries’ legislation, but research shows that address- These institutions are not mutually exclusive, and ing customer complaints is beneficial to business sus- some economies have more than one third-party tainability.15 The Financial Access 2010 survey asked mechanism to address customer complaints. El Salva- if an economy’s laws or regulations set standards for dor, Pakistan, Poland, South Africa, Taiwan (China) complaints resolution by financial institutions. Only and Korea all have a financial ombudsman, a general about a third of the economies require financial institu- ombudsman, and a mediation service for resolving tions to implement procedures for resolving customer financial disputes. The Czech Republic, Greece, Italy, complaints, set limits for timeliness of response, and Mexico, and Peru have a financial ombudsman and a ensure accessibility. Even though many economies re- mediation service. port that institutions have put in place voluntary codes of conduct, it is not clear how effective these voluntary Financial ombudsmen are more common in high- arrangements are due to a lack of monitoring. income countries. Fifty-seven percent of high-income countries reporting have a financial ombudsman in If a customer’s complaint is not resolved under the fi- place, compared with 5 percent of low-income coun- nancial institution’s internal procedures, do economies tries (figure 3.10). have an effective third-party dispute resolution mecha- nism such as an ombudsman16 or a mediation center? Institutional arrangements and funding for third-party dispute resolution mechanisms vary across countries. Financial Access 2010 survey results show that 58 per- In a majority of economies that provided data on fund- cent of economies have some type of ombudsman or ing (41 of 63 economies), the ombudsman or equiva- mediation service. Thirty percent have a specialized lent institution is fully funded by the government, financial ombudsman, whereas in 21 percent of coun- mostly through the annual budget of the relevant gov- tries, a general ombudsman handles financial cases ernment agency, and is sometimes part of the financial along with other consumer protection issues. Media- regulator’s budget, as is the case in Israel, Nepal, and tion services are more common in Asia, where about Uruguay. In eight more economies, the ombudsman half of the economies report having established one is cofunded by the government and the private sec- 32 F I N A N C I A L A CC E S S 2 0 1 0 FIGURE 3.11 tor. And in 30 out of 63 economies, dispute resolution Excessive rates/fees is the most common mechanisms are funded by members (mostly service cause for complaint providers) or industry associations. Privately funded No loan approval dispute resolution schemes can be voluntary, as is the ATM transactions case in Chile, or mandatory, as in Armenia. Credit card issues Mortgage/housing loan What are the most frequent causes for complaints Insurance Excessive rates/fees across countries? Excessive interest rates and fees is by 0 10 20 30 far the most common cause for complaint. Out of 70 Number of economies economies providing data, 31 ranked excessive inter- by most common complaint Source: Financial Access database. est or fees as the most frequent cause for complaint, and 48 named it among the top three (figure 3.11). FIGURE 3.12 Product-specific complaints related to credit cards, The number of complaints received by ombudsmen varies greatly across countries mortgages, and ATMs all rank at about the same level. Only two economies listed not getting approved for a Honduras loan as the most frequent cause for complaint. Gambia Botswana Belgium A number of economies reported additional causes for Norway complaints. In the Czech Republic, the most frequent Kuwait complaint concerns domestic payment transactions. In Malaysia Finland it is the functioning of the deposit guarantee Armenia scheme; in Mozambique it is insurance complaints and Dominican Republic Sweden the register of declined checks. A number of economies Chile cited complaints related to bank staff as the most com- Azerbaijan mon. In Namibia, Norway, and Hungary, complaints Puerto Rico relate to poor financial advice provided to the custom- Spain er; in Syria and Uganda, they relate to mistreatment of Slovak Republic customers by bank staff. Venezuela Denmark How often are complaints referred to the Netherlands third-party dispute resolution entities, and Switzerland how often are they upheld? New Zealand France Fifty-three of the 82 economies where such a mecha- Singapore nism exists provided statistics on the number of com- Israel Australia plaints received by the third-party dispute resolution Colombia mechanism. These ombudsmen or equivalent institu- Namibia tions vary substantially in the scope of operations and Mexico the types of disputes they are set up to address. The Fi- Korea, Rep. nancial Ombudsman Service in the United Kingdom United Kingdom and Condusef in Mexico, both of which handle a wide Portugal 0 1 2 array of consumer complaints on a range of financial Consumer complaints per 1,000 adults services, received about 130,000 complaints each in the past year—2.52 and 1.76 per 1,000 adults, respec- Source: Financial Access database. F I N A N C I A L A CC E S S 2 0 1 0 33 tively (figure 3.12). On the other hand, the Federal Effective third-party dispute resolution mechanisms Reserve Consumer Help Center in the United States— are an essential part of consumer protection frame- one of a number of dispute resolution mechanisms— works, especially in economies with weak judiciary received about 5,000 complaints. In economies where systems. Yet 34 economies reporting do not have an ombudsmen or equivalent institutions were created ombudsman or an equivalent scheme, relying solely recently, customers may not know how to file com- on the court system to resolve disputes. And few econ- plaints or may be skeptical about the effectiveness of omies where these mechanisms exist are able to pro- the scheme. Poland and Bulgaria reported nine and vide statistics on the number of complaints received five complaints received, respectively—less than one and resolved. In a number of economies the dispute per million adults. In a functioning system, the num- resolution schemes are new and may not be known to ber of complaints is likely to increase in the early years consumers and thus are rarely used. Across the board, of operation as public awareness and confidence in further work to clarify legal and regulatory frame- effective resolution improve. In the United Kingdom, works for the role of third-party mechanisms and to for example, the number of complaints referred to the improve monitoring and consumer awareness can go Financial Ombudsman Service increased fivefold be- a long way in enhancing overall effectiveness of the tween 2000 and 2009. consumer protection system. Respondents were also asked to provide the total num- REGIONAL TRENDS ber of cases processed and closed, and out of these cas- IN CONSUMER PROTECTION es, the number of cases that were resolved in favor of the customer. Thirty economies provided data on both How do consumer protection frameworks vary from figures. In 67 percent of these economies, less than half region to region? As mentioned earlier, almost all of all complaints were resolved in favor of the customer. economies have consumer protection legislation on Variation between the economies is substantial, though. the books, whether an explicit financial consumer In Singapore only 2 percent of customer complaints protection law or a general consumer protection law. were resolved in the customer’s favor. But in Venezuela, However, the trends on enforcement and implementa- resolution was in the favor of the customer 97 percent tion mechanisms tell a different story. of the time. International comparisons of this sort are not very informative, as they mostly reflect structural Figure 3.13 displays the regional means for five areas differences in the existing systems. But at the country measured by the Financial Access 2010 survey. The level, consistent tracking of the number of complaints first area measures the average number of the four leg- and the number of complaints upheld by the ombuds- islative requirements on fair treatment practices im- man can be an important policy tool. In the United plemented by each region. For example, South Asian Kingdom, Malaysia, Sweden, Spain, Singapore, Paki- economies on average require 46 percent (or 1.8 out stan, and Canada, information on complaints resolu- of 4) of the fair treatment practices measured by the tion by product is publicly available and is shared with survey. The second area measures the average num- regulators to inform policy. For example, spikes in the ber of the 13 disclosure requirements upon opening number of complaints or a share of upheld cases for a implemented by each region. For example, Sub-Saha- certain product may indicate a systemic problem and ran African economies on average require 37 percent may warrant regulatory action. In a number of coun- (or 4.8 out of 13) of the disclosure requirements upon tries, the regulator’s role is broader, as in Pakistan and opening measured by the survey. The third area mea- Ecuador, where regulators can receive appeals if the sures the average number of the 13 periodic disclosure customer is not satisfied with the ombudsman. requirements implemented by each region. The fourth 34 F I N A N C I A L A CC E S S 2 0 1 0 FIGURE 3.13 Regional differences in consumer protection legislation and implementation % of economies With designated 59 unit within regulatory body 48 With at least 81 one recourse 33 50 mechanism 31 38 55 67 Average extent 42 50 44 of periodic 54 disclosure 83 42 32 46 30 46 Average extent 63 of disclosure 37 29 at opening 60 44 56 59 37 42 86 Average extent 56 65 76 of fair treatment 47 46 50 Sub-Saharan East Asia South Europe & Middle East & Latin America High-Income Africa & Pacific Asia Central Asia North Africa & Caribbean OECD Source: Financial Access database. area measures the percentage of economies in each re- NOTES gion that have at least one recourse mechanism. And 1. For an overview, see Rutledge (2010) and Brix and McKee the fifth area measures the percentage of economies (2010). in each region that have an allocated unit for financial 2. See Gokhale (2009), Reuters (2009), and Reille (2009). consumer protection. 3. Peterson (2003). 4. Ibid. Overall, high-income countries have on average the 5. See Ardic, Ibrahim, and Mylenko (forthcoming) on consumer most comprehensive consumer protection framework. protection for further details of statistical analysis. Latin American economies follow close behind, par- 6. The focus of the Financial Access 2010 survey was consumer protection for loan and deposit services, rather than for pen- ticularly on fair treatment requirements and recourse sions, investments, and insurance. mechanisms. This can be partly attributed to the fact 7. Rutledge (2010). that consumer protection frameworks in high-income 8. Godfrey et al. (2008). countries have existed longer, and thus are better es- 9. Lusardi and Tufano (2009). tablished and have had a chance to improve over time. 10. U.S. GAO (2005). Economies in Sub-Saharan Africa and South Asia have 11. Rutledge (2010); Brix and McKee (2010). the least comprehensive legal frameworks in terms of 12. Ibid. 13. Office of Fair Trading (2009). the coverage of fair treatment and disclosure require- 14. Financial Services Authority (2010). ments. And across all groups, less than 60 percent of 15. Ibid. economies have an allocated team working on con- 16. An ombudsman is an entity or a person designated to investi- sumer protection issues. gate complaints and mediate fair settlements. In some cases, the ombudsman is completely independent of any government agency (including being housed by an industry association), and in other cases, it can be housed under the relevant regula- tory authority. F I N A N C I A L A CC E S S 2 0 1 0 35 SME FINANCE: S U P P LY - S I D E D ATA AVA I L A B I L I T Y Lack of finance is one of the key obstacles SME support as a priority for financial regulators, and to SME growth 47 percent report implementing reforms that support SME finance. Most of these programs and reforms set SMEs are critical for sustainable economic growth. In targets for the number of SMEs reached, volume of high-income countries, SMEs constitute 67 percent SME financing facilitated, and employment created. on average of the formal employment in the manufac- Some progress has been made in collecting compara- turing sector. In developing countries, this number is ble demand-side information across countries through lower at about 45 percent. Similarly, SMEs contribute firm surveys by the World Bank, European Bank for a sizeable share to formal GDP: 49 percent on average Reconstruction and Development (EBRD), and other in high-income countries and 29 percent on average development organizations. Yet, to date there are no in low-income countries.1 reliable data across countries on the volume of SME financing, which makes it difficult to set global targets A number of factors, ranging from the overall busi- and track progress. In 2004, the OECD identified the ness environment to the availability of an educated and need to foster greater international comparability of trained labor force, affect the growth of SMEs. But lack SME statistics,6 and a number of initiatives are under of access to finance consistently ranks as one of the way to reach this goal. One of them is to strengthen most important obstacles to doing business, according the culture of evaluation of SMEs and entrepreneur- to World Bank surveys of firms in more than 100 econ- ship policies across nations.7 Moreover, the SME Per- omies.2 Empirical research supports entrepreneurs’ formance Review, launched by the European Com- views and indicates that lack of finance is negatively mission in 2008, represents one of its main tools to correlated with SME firm growth.3 Access to finance monitor the implementation of the Small Business for SMEs remains low. In the survey of firms, only Act.8 It represents a comprehensive source of informa- about 32 percent of SMEs had a loan with a financial tion on the performance of SMEs in Europe. institution, compared with 56 percent of large firms.4 Financial Access 2010 contributes to the effort to im- The appeal for the need to support SMEs is hardly prove measurement of SME financing and reviews SME new. Most economies have comprehensive SME fi- finance data available to financial regulators as well nance programs, many of which trace their history to as data collection methodologies. Supply-side data— the 1950s and 1960s. Governments around the world information collected from financial service provid- have used interest rate subsidies, directed lending, ers—are likely the most effective tool to collect in- guarantee funds, and a variety of other approaches to formation on SME finance volume. Firms are often get SMEs financed. However, the gap between SMEs reluctant to share information on the dollar amounts and larger businesses remains. With the recent fi- of their operations, such as sales or loan sizes, during nancial crisis, many economies are looking to SMEs interviews. As a result, information on the volume of to provide much needed jobs and to help pull their SME financing is difficult to obtain from firm surveys economies out of recession, putting SMEs back into and requires a survey of credit providers. The most the spotlight of development and political agendas. economical way to collect this information worldwide is to survey government authorities instead of survey- In 2009, G-20 countries committed to identifying les- ing individual financial institutions in each economy. sons learned on innovative approaches to providing The Financial Access 2010 survey, as a survey of finan- financial services to SMEs and to promoting success- cial regulators, evaluates whether they collect infor- ful regulatory and policy approaches.5 In the Finan- mation on SMEs. cial Access 2010 survey, 44 percent of economies cite 36 F I N A N C I A L A CC E S S 2 0 1 0 FIGURE 4.1 How often are SMEs required to report about their lending? % of economies by frequency of required reporting Regular Irregular No No response reporting reporting reporting to survey No response to survey High-Income OECD 15% Latin America & Caribbean Regular Europe & Central Asia reporting No reporting 42% Sub-Saharan Africa 32% Middle East & North Africa East Asia & Pacific South Asia Irregular 0 25 50 75 100 reporting 11% Source: Financial Access database. The objectives of this year’s survey were to identify the Financial regulators in 53 percent of the economies feasibility of consistent cross-country data on SMEs that responded to the survey monitor the level of lend- going forward, summarize methodological challenges, ing to SMEs. Most important, in 42 percent of these and provide a rough estimate of SME financing volume economies these data are collected through regular by regulated financial institutions. The analysis of top- reporting (figure 4.1). Financial regulators in middle- ics such as the effectiveness of SME support programs, and low-income countries are more likely to require the impact of the SME sector on economic growth, and regular reporting of SME statistics. Out of 59 econo- the relationship between access to finance and SME mies that collect SME lending data on a regular ba- development is beyond the scope of this year’s report. sis, 86 percent are low- and middle-income countries. Most economies in East Asia and the Pacific, as well as in South Asia, monitor SME lending at least peri- Financial regulators in more than half of the economies worldwide monitor levels of SME odically (figure 4.1). Often, these data are collected to financing, but use a variety of definitions monitor compliance with lending targets set for prior- ity sectors, including SME, as is the case in Afghani- Data on SME volumes are collected by financial regu- stan, India, the Philippines, and Pakistan. lators in 74 out of 142 economies surveyed in Finan- cial Access 2010. In 21 more economies, SME finance In a number of economies where data are not collected statistics are collected by other government agencies. through regular reporting, they are collected through The Ministry of Economy collects SME data in Chile, surveys of financial institutions or by estimating lend- Lithuania, Taiwan (China), Nicaragua, and Venezuela. ing volume in credit registries. Credit registries con- The Ministry of Trade monitors SME lending in Alba- tain loan-level data and allow estimation of a variety nia, Botswana, Colombia, and Zambia; the Ministry of SME statistics using loan size as a proxy for an SME of Cooperatives does so in Indonesia. In a number of definition. In 13 of the reporting economies, including economies, including Japan, Denmark, and Greece, Argentina, Tunisia, and Brazil, regulators use public the National Statistics Office collects this type of data. credit registries to estimate the volume of SME lend- F I N A N C I A L A CC E S S 2 0 1 0 37 ing. In 23 economies, regulators conduct periodic sur- Lack of a clear definition is the main veys of financial institutions to monitor SME lending. challenge in measuring SME finance The frequency of surveys varies. For example, Estonia, Singapore, and Armenia conduct such surveys annu- What is an SME? Definitions vary greatly across coun- ally, Algeria and Tunisia do so monthly, and Uganda tries, and financial regulators in 68 economies report- does it on an ad-hoc basis. Financial institution sur- ed that their SME definition is based on number of veys can be an important tool for a regulator to col- employees, sales volume, or loan size. Number of em- lect information not only on SME lending volumes ployees and sales volume seem to be the most widely but also on other aspects of SME finance such as fees used criteria, present in 50 and 41 economies, respec- and number of applications received and rejected, all tively. Sixteen economies use the value of loans. Often, of which are essential for the implementation of SME the definition relies on multiple criteria and depends finance reforms and programs. In 10 economies, 8 of on the industry. In Pakistan, for example, SME refers which are in the Western African Monetary Union, to an entity that employs no more than 250 persons in regulators combine information from the credit regis- manufacturing or service sectors or 50 persons in the tries and periodic surveys from financial institutions. trade sector, as well as sales criteria of up to $590,000 for trade and industry firms, $1.2 million for manu- There is a clear regional pattern in reporting SME facturing firms, and no more than $3.5 million for any data. More than half of the economies in Asia and Af- industry of operation. In addition, a number of econo- rica report that they regularly collect information on mies use alternative criteria such as total assets, fixed SME finance. These are also regions where regulators assets, and turnover, and 17 economies report that no tend to identify access to finance as a priority. Finan- official definition exists at all. cial regulators in high-income countries and in Latin America and the Caribbean are the least likely to col- The following examples underscore the diversity of lect data on SME finance, because some other agency definitions used. In Zambia it is a firm with fewer than is usually assigned this task. 50 employees and sales of no more than $50,000. In Russia SMEs include individual entrepreneurs and The responsibility to promote SME finance often lies firms with fewer than 250 employees and sales of up with more than one government agency, each of which to $30 million. In Canada it is a firm with up to 500 also has the responsibility to monitor the performance employees and sales of up to $45 million at current of the sector, including availability of finance. Agen- exchange rates. And in Korea, SMEs can have up to cies collecting regular statistics from financial institu- 1,000 employees and sales of up to $130 million. tions, such as central banks and bank regulators, are well positioned to collect SME finance statistics, and The most common cutoff points for the maximum already do so in a majority of economies. Experience number of employees cluster around 50, 100, and 250 in economies such as Malaysia, Russia, Greece, and employees (figure 4.2). A large portion of economies the Czech Republic that have introduced monthly re- (20 out of 49 that use number of employees as a crite- porting for SMEs shows that SME data collection on a rion to define SMEs) set 250 employees as the maxi- monthly basis is possible when there is a clear defini- mum cutoff.9 Maximum values of sales range from tion of SMEs, in addition to a well-established report- $50,000 in Zambia to over $70 million in Korea, Ger- ing process that is easy to follow. many, France, Greece, and Hungary, with no clear pat- terns or clustering. The maximum sales cutoff value is closely correlated with income per capita but does not translate into a common ratio of SME maximum sales 38 F I N A N C I A L A CC E S S 2 0 1 0 FIGURE 4.2 Definitions of SMEs cover a large range in sales volume and number of employees Annual sales Ratio of sales to GDP per capita Number of employees Azerbaijan Azerbaijan Zambia Sudan High-income countries Costa Rica Liberia Botswana New Zealand Taiwan, China Italy Lao PDR Zimbabwe Estonia Ghana El Salvador Ukraine Oman El Salvador Panama Estonia Spain Iran, Islamic Rep. Uruguay Zambia Cape Verde Cape Verde Mongolia Oman Albania Lao PDR United Kingdom Uzbekistan Lebanon Hong Kong SAR, China Malaysia Armenia Canada Afghanistan Netherlands Botswana France Uruguay Germany Bangladesh Slovenia Malaysia Greece Mongolia Mexico Thailand Serbia Colombia Indonesia Taiwan, China Morocco Portugal Afghanistan Lithuania Ukraine Albania Ghana Ireland Russian Federation Moldova Argentina Greece Moldova Serbia, Rep. of Lithuania Mexico Hungary Latvia Korea, Rep. Spain Madagascar Kazakhstan South Africa Poland 0 2,000 4,000 6,000 Hungary Pakistan United Kingdom Russian Federation Nigeria Germany Croatia Slovenia Tunisia Canada Korea, Rep. 1,000 0 100 250 500 Source: Financial Access database. F I N A N C I A L A CC E S S 2 0 1 0 39 to average income per capita. Maximum sales values In the long term, encouraging financial institutions represent 23 times income per capita in Azerbaijan at to collect and maintain information on employee the lower end and more than 8,000 times income per numbers and sale volumes will allow for more accu- capita in South Africa at the higher end (figure 4.2). rate monitoring of SME lending. The data may also be useful to banks themselves for client segmentation Number of employees and sales volume are prob- and development of SME scoring models. In the short ably the most accurate parameters to define SME, but term, collecting data using loan size criteria as a proxy this information is not always available from lend- may provide a reasonable estimate of SME volumes ers. Banks may collect this information at the time of for regulators tasked with monitoring this statistic. evaluating loan applications but often do not keep it A number of efforts aim to streamline and harmo- in their systems and as a result are not able to report nize SME definitions,10 although the heterogeneity lending volumes based on these criteria. Thus, some of SMEs themselves and the nature of the economies economies choose to rely on loan size as a proxy when in which they operate might mean that establishing a collecting information on SME finance from financial global definition is not feasible. institutions. Extracting information on loans to firms Variation in definition is not significantly below a certain size and loans to individual entrepre- correlated with variation in lending volumes neurs can be a reasonable approximation for SME to SMEs lending volume. Fifteen economies in the Financial Access 2010 survey reported using loan size criteria Do economies that set higher cutoff criteria for the to define SMEs (figure 4.3). As in sales criteria, high- number of employees and sales tend to have a higher income countries tend to have higher loan size brack- ratio of SME lending volume to GDP? The correla- ets in their definition of SMEs. Canada, the United tion between the maximum number of employees and States, Estonia, and Australia set the loan value cutoff the ratio of SME loans to GDP reported in Financial for SMEs above $1 million. Access 2010 is positive but weak and not statistically significant at the 10 percent level.11 The correlation coefficient between the maximum definition for sales FIGURE 4.3 Economies that define SMEs by loan value and SME lending volume is also not statistically signif- icant. These results must be interpreted with caution Peru as estimates are based on a small number of observa- High-income countries Tajikistan tions: 40 for the number of employees and 31 for the Dominican Republic sales volume. Lack of a strong correlation (except for Guatemala Zimbabwe those economies defining SMEs as firms with 1,000 Syrian Arab Republic employees or more) indicates that the variation in the Morocco definitions for the most part is not a strong enough Liberia factor to permit cross-country comparison of the data Azerbaijan Kuwait on SME lending using national definitions. South Africa United States Estimating global SME volume Estonia Australia In Financial Access 2010, 50 economies provided data Canada on the total value of outstanding loans to SMEs (fig- 0 500 1,000 1,500 2,000 ure 4.4). Out of these, 30 economies (60 percent) are Loan value threshold middle-income and 14 (28 percent) are high-income. $ thousands Source: Financial Access database. Among low-income countries, only Afghanistan, Ban- 40 F I N A N C I A L A CC E S S 2 0 1 0 FIGURE 4.4 Value of outstanding loans to SMEs as a % of GDP as a % of commercial bank loans to individuals and nonfinancial businesses Tajikistan Hong Kong SAR, China High-income countries Cape Verde Botswana Guatemala Guatemala Cape Verde Indonesia Indonesia Botswana Hong Kong SAR, China Panama Peru Tajikistan Argentina Peru Afghanistan Singapore Liberia Costa Rica Pakistan Argentina Ecuador India Panama Jordan Brazil United States Costa Rica South Africa India Pakistan Armenia Brazil Uzbekistan Kazakhstan United States Iran, Islamic Rep. Russian Federation Australia Georgia Russian Federation El Salvador El Salvador Iran, Islamic Rep. Liberia Mongolia Belgium Kazakhstan Malaysia Uruguay Ecuador Turkey Netherlands Poland Italy Jordan Mongolia Morocco Taiwan, China France Morocco South Africa Hungary Albania Uzbekistan Italy Georgia Hungary Poland Singapore Turkey Australia Armenia Bangladesh Estonia Malaysia Afghanistan Belgium France Taiwan, China Albania Thailand China Estonia Thailand Japan Portugal Korea, Rep. Uruguay Latvia Japan China Latvia Portugal Bangladesh Netherlands Korea, Rep. 0 10 20 30 40 50 0 10 20 30 40 50 Source: Financial Access database. F I N A N C I A L A CC E S S 2 0 1 0 41 FIGURE 4.5 SME lending volumes are higher in developed credit markets and where starting a business is faster SME lending volume / GDP SME lending volume / GDP High High Low Low Low High Faster Slower Private credit / GDP* Time to start a business ** Source: Financial Access database. * Correlation controls for time to start a business and offshore centers. The relationship is statistically significant at the 5 percent level. ** Correlation controls for expected private credit/GDP and offshore centers. The relationship is statistically significant at the 5 percent level. gladesh, Liberia, Pakistan, Tajikistan, and Uzbekistan overall private credit to GDP, number of days to start a provided these data points. The ratio of SME lending business, and a control for offshore financial centers are to GDP ranges from less than 1 percent in Tajikistan to used as explanatory variables in this model.12 The level more than 50 percent in the Netherlands and Portugal. of SME finance is likely to be affected by the overall The median ratio of SME credit to GDP is 6.4 percent, development of the credit market as measured by the and in 75 percent of the economies in the sample, it is ratio of private credit to GDP (figure 4.5). In addition, below 15 percent. economies in which it is easier to start a business are likely to have higher levels of SME lending. One poten- The share of SME loans as a percentage of total loans tial explanation is that in those economies where it is also varies greatly across countries, reflecting the struc- more difficult to start a business, there are fewer formal ture of the local financial market (figure 4.4). The ratio SMEs to finance, and hence lower SME lending. This of SME loans to total loans ranges from less than 1 per- finding supports earlier evidence on the importance of cent in Hong Kong Special Administrative Region (Chi- reforming business registration and other regulations na), to 56 percent in Korea, where SMEs can employ up affecting firm entry.13 The share of SME finance in rela- to 1,000 people. Overall, high-income countries tend tion to total lending volume is likely to be affected by to have higher ratios of SME finance volume to GDP the structure of the financial market. Specifically, off- and to total loans, suggesting a more developed SME shore financial centers are likely to have high levels of finance market compared with developing countries. credit to GDP but low levels of SME financing. To assess the global volume of SME financing from for- On the basis of these estimates, global volume of SME mal institutions for Financial Access 2010, the value of lending was roughly $10 trillion in 2009 (map 4.1). SME lending to GDP ratio was estimated for economies The bulk of SME lending volume—70 percent—is that have not provided statistics on SME finance using a concentrated in high-income countries. The second regression model. Model selection is based on two fac- largest SME loans market is in East Asia and the Pa- tors: data availability and predictive power. The ratio of cific, which accounts for 25 percent of the total SME 42 F I N A N C I A L A CC E S S 2 0 1 0 Europe & Central Asia $256 billion High-Income OECD East Asia & and Non OECD Pacific $7 trillion $2.5 trillion Middle Latin America East & & Caribbean North $133 billion Sub-Saharan Africa Africa $43 billion MAP 4.1 South $45 billion Asia SME lending volume $73 billion (% of GDP) 0–4 4–8 8–20 20 and above NO DATA Note: OECD = Organisation for Economic Co-operation and Development The map plots a ratio of SME lending volume to GDP. Actual data is presented for 50 economies that provided information. For the remainder of the economies, the ratio of SME lending to GDP is predicted by a regression model controlling for the ratio of private credit to GDP, the number of days to start a business (Doing Business database) and a dummy for offshore financial centers. See Ardic, Mylenko and Saltane (forthcoming) for detailed methodology. Data for Taiwan (China), Hong Kong SAR (China), and Puerto Rico (US) have been broken out from the national dataset. lending volume. But 90 percent of this amount is in NOTES China, where the SME definition is broad and SMEs can employ up to 2,000 people. Without China, the to- 1. Ayyagari, Beck, and Demirgüç-Kunt (2007). tal SME lending volume in East Asia is comparable to 2. World Bank Enterprise Analysis Surveys (various years). 3. Beck and Demirgüç-Kunt (2006). Eastern Europe and Central Asia, or about 3 percent of 4. World Bank Enterprise Analysis Surveys (various years). the total. Africa, Middle East, and South Asia together 5. The Pittsburgh G-20 Summit (2009). account for only 1.6 percent of the total SME volume. 6. OECD (2004). 7. OECD (2007). A similar picture emerges when comparing ratios of 8. European Commission (various years). SME lending to GDP (map 4.1). The median ratio of 9. This figure is based only on data provided in the Financial Ac- SME lending to GDP in high-income OECD countries cess 2010 survey and does not include any external sources. is about 13 percent, compared with the 3 percent world 10. OECD (2004). median. In more than 80 percent of economies, the 11. The correlation, controlling for income per capita, is not statisti- cally significant when countries that set a maximum definition SME lending to GDP ratio is below 10 percent. at 1,000 employees or more are excluded (Korea and China). The estimate is based on 65 observations. Financial Access 2010 survey data were supplemented by information on maximum Data analysis indicates that further efforts are neces- number of employees for SMEs from other sources, including sary to define the criteria and processes for collecting World Bank (2004) and World Bank Enterprise Analysis Sur- data on SME financing, which can also be compara- veys (various years). ble across countries. A recently created SME Finance 12. For details on estimation results see Ardic, Mylenko, and Sal- tane (forthcoming). A number of macroeconomic and business subgroup under the G-20 Financial Inclusion Experts environment factors were tested, but relationships are not sta- Group,14 bringing together international experts, de- tistically significant after controlling for overall level of private credit to GDP. velopment agencies, and governments, offers an excel- 13. See World Bank (2004) for an overview. lent platform for the establishment of a comprehensive, 14. See the Pittsburgh G-20 Summit (2009), “Leaders’ Statement,” consistent, and scalable framework and mechanism to paragraph 41. measure and track the progress over time of SME ac- cess to financial services in the developing world. F I N A N C I A L A CC E S S 2 0 1 0 43 D ATA AVA I L A B I L I T Y FIGURE 5.1 More economies provided data on the value and num- More economies provided data in 2010 ber of loans and deposits across all types of institutions Reported in in the Financial Access 2010 survey compared to the Data provided Reported in Financial Financial Access 2009 Access 2010 2009 survey (figure 5.1). Information for commercial Commercial banks Number of deposit accounts banks remains the most comprehensive. But even for Volume of deposit accounts commercial banks, while most economies provided Number of loans information on the values of deposits and loans, only Volume of loans 76 percent had data on the number of deposits and 53 Cooperatives percent on the number of loans. Number of deposit accounts Volume of deposit accounts Number of loans Information for nonbanks is limited for four primary Volume of loans reasons. First, if nonbanks are not regulated by the SSFIs main financial regulator, this regulator may not have Number of deposit accounts data on these institutions. Second, even if nonbanks Volume of deposit accounts are regulated, it may be difficult to collect accurate data Number of loans on their performance because of a lack of adequate Volume of loans systems in nonbanks. Third, in economies where there Microfinance institutions Number of deposit accounts are several types of regulated nonbanks, the regula- Volume of deposit accounts tor may be able to collect information on only certain Number of loans types of institutions, resulting in distorted statistics. Volume of loans Fourth, institutions may change their type (in other 0 20 40 60 80 100 120 140 words, the way they categorize themselves), or a new Number of economies providing data Source: Financial Access database. type of institution may be introduced that fits into one Note: SSFI = specialized state financial institution. of the categories in the Financial Access 2010 survey, introducing breaks in data consistency. report: 85 economies for the number of deposits and Most economies take measures to improve data avail- 65 for the number of loans. ability, demonstrated by the improved responses to the Financial Access 2010 survey and responses to To understand what research and data collection in- the International Monetary Fund’s (IMF) “Access to struments beyond regular reporting are available to Finance” project launched this year.1 A number of financial regulators, the Financial Access 2010 survey countries, such as Mexico and Bangladesh, were able asked what type of survey instruments (household to provide more comprehensive coverage of nonbanks surveys, surveys of firms, surveys of financial institu- this year, including institutions that were not covered tions) they use for collecting information on the level last year. of access to financial services. With improved and cheaper technology and the push Fifty-one percent of financial regulators responding for transparency and better reporting, data on access say they collect at least some information through one will undoubtedly improve over time. But even today, type of survey instrument (figure 5.2). Household sur- available data provide useful insights. A consistent veys are most popular, followed by surveys of financial sample in which comparable data are available for institutions. Surveys of firms are the least popular. both years is sufficiently large, at least for commercial banks, enabling empirical analysis presented in this 44 F I N A N C I A L A CC E S S 2 0 1 0 FIGURE 5.2 Data collection 49% 51% of economies No data collect information collected through at least one survey % of economies by type and frequency of survey 13 19 18 Annually Every 3 2 or more 10 1 2 Every 2 years years 22 16 Irregular 23 52 58 64 Never Household Survey of Survey surveys financial of firms institutions Source: Financial Access database. Regular surveys by regulators are an important source of information for guiding policy. For example, in the United States, the Senior Loan Officer Opinion Sur- vey on Bank Lending Practices is conducted quarterly to inform the meetings of the Federal Open Market Committee determining U.S. monetary policy. The survey questions cover changes in the standards and terms of the banks’ lending and the state of business and household demand for loans. These surveys could also become an important tool for collecting information comparable across countries by introducing standardized questions. NOTE 1. IMF (2009). F I N A N C I A L A CC E S S 2 0 1 0 45 M E T H O D O LO G Y Financial Access 2010 is the second in an annual series Cooperatives, credit unions, and mutuals Financial presenting indicators on access to savings, credit, and institutions that are owned and controlled by their payment services in banks and regulated nonbank fi- members (customers), regardless of whether they do nancial institutions. The report updates data on access business exclusively with their members or with mem- to financial services from a survey of financial regula- bers and nonmembers. tors in 142 economies and includes new chapters on financial inclusion mandates and reforms, consumer Specialized state financial institutions Specialized protection policies, and SME finance. state-owned institutions are extensions of the govern- ment whose main purpose is to lend support to eco- Survey design nomic development and/or to provide savings, pay- Data were collected through a survey sent to the main ment, and deposit services to the public. They include financial supervisors, such as central banks or bank su- postal banks, government savings banks, SME lending pervisory agencies. The survey questionnaire consists facilities, agriculture banks, and development banks. of two parts: the statistical table and policy questions. Microfinance institutions Institutions whose primary Statistical table Similar to the 2009 survey, the business model is to lend to (and possibly take depos- 2010 questionnaire collected data on the numbers its from) the poor, often using specialized methodolo- and volumes of deposit accounts and loans, number gies such as group lending. of bank branches, ATMs, and POS terminals, as well as other measures of the use of financial services by The data collected using this institutional classifica- banks and formal regulated nonbank financial insti- tion necessarily understate the scale of microfinance tutions. A formal financial institution is a registered because many banks, cooperatives, and specialized business whose primary activity is providing financial state-owned institutions provide microfinance servic- services. Formal financial institutions can be regulated es as part of their activities. or nonregulated. A financial institution is considered regulated if it is subject to regulation and/or supervi- Policy questions The second part of the survey con- sion by any of the state regulators. The regulatory re- tains questions on regulations relating to the provi- quirements that apply to such institutions could be sion of financial services, including financial inclusion prudential or nonprudential. The data were collected mandates, consumer protection, and measurement of for commercial banks and for regulated nonbank fi- SME finance. nancial institutions, adding value to other studies that Survey sample have preceded it. To make the cross-country compari- son of the services provided by the different types of Questionnaires were sent to 151 economies: 13 in East financial institutions possible, the respondents were Asia and the Pacific, 27 in Europe and Central Asia, 20 asked to classify types of regulated institutions into in Latin America and the Caribbean, 14 in the Middle four broad categories:1 East and North Africa, 6 in South Asia, 40 in Sub- Saharan Africa, and 23 in the high-income OECD Commercial banks Banks with a full banking license. countries. For practical purposes, most small islands In some countries, the term “universal banks” or other and economies at war were not included. The sample terms may be used. Majority government- and state- covers more than 94 percent of the world’s population owned banks should be included in this category to and nearly 98 percent of global GDP. the extent that they perform a broad set of retail bank- ing functions and are regulated and supervised in the The questionnaires were sent directly to the governors’ same manner as privately owned banks. offices of central banks. When appropriate, they were also sent to monetary authorities or banking super- visory agencies. Depending on the economy and the 46 F I N A N C I A L A CC E S S 2 0 1 0 structure of the regulatory authority, the questionnaires access indicators, double-counting clients with mul- were filled out by one or several of the following de- tiple accounts. Another imperfection stems from the partments: research, statistics, supervision, and foreign different treatment of dormant accounts—some banks relations. Of the 151 questionnaires sent, 142 econo- close dormant accounts after six months of inactivity, mies responded, for a response rate of 94 percent. while others keep such accounts open for many years. The data passed several robustness checks. First, the Global estimates and maps of banked individuals and SME lending numbers and values of deposit and loan accounts for banks and other regulated financial institutions were Maps for banked individuals use data from the Finan- compared with those from the 2009 survey. Where cial Access database as well as other sources. More spe- discrepancies exceeded 20 percent from the previ- cifically, country-level data from the Financial Access ous year, extensive follow-up was conducted to verify database are complemented by various household sur- the numbers or to explain the data differences. Values veys. Because most financial regulators are unable to were also cross-checked with GDP, population, private report data on the number of individuals with a bank credit, and deposit statistics available in World Devel- account, the use of household surveys is of great value opment Indicators and International Financial Statis- even though these surveys are not fully comparable tics databases. across economies and time. Multiple checks for internal consistency and rational- Nonetheless, data from 46 such household surveys ity were also conducted. When anomalies were found, across the world are used to estimate a regression the respondents were asked to provide clarification. In model.2 The share of households having a deposit ac- the absence of adequate clarity, the data points were count in commercial banks is then predicted using the dropped (in only a few cases). estimates of this model where the number of deposit accounts per 1,000 adults and number of branches per Main limitations of the approach km2 are controlled for.3 The survey collects information only on regulated financial institutions, leaving out nonregulated pro- Financial Access 2010 predicts the ratio of SME lend- viders of financial services. This practice is likely to ing to GDP using the ratio of overall private credit significantly understate the scale of credit services, to GDP, a control for offshore financial centers (both which are often not regulated, unlike deposit services. from the IMF), and number of days to start a busi- Even though the main financial regulator was asked to ness (from the Doing Business database) by employing provide data on all regulated financial institutions, in a regression model.4 Model selection is based on two cases where some financial institutions are regulated factors: data availability and predictive power. by other regulators, the data are rarely available. As a result, the available data understate the true scale of NOTES financial services provided by regulated financial in- stitutions and likely understate the size of the nonbank 1. To improve cross-country data comparability, definitions have segment in relation to commercial banks. been slightly modified from those in Financial Access 2009. 2. This regression model was originally developed by Beck, Demir- güç-Kunt, and Martinez Peria (2007) and Honohan (2008). Data on the number of borrowers and depositors are 3. For estimation results, see Ardic, Heimann, and Mylenko (forth- available in only a few economies. Instead, the number coming) on financial access. of deposit and loan accounts is used as a basis for core 4. For estimation results, see Ardic, Mylenko, and Saltane (forth- coming) on SME financing. F I N A N C I A L A CC E S S 2 0 1 0 47 REFERENCES Ardic, Oya Pinar, Maximilien Heimann, and Nataliya Collins, Daryl, Jonathan Morduch, Stuart Rutherford, and Mylenko. Forthcoming. “Access to Financial Services and Orlanda Rutheven. 2009. Portfolios of the Poor: How the Financial Inclusion Agenda Around the World.” World World᾽s Poor Live on $2 a Day. 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F I N A N C I A L A CC E S S 2 0 1 0 49 REGIONAL PROFILE East Asia and the Pacific Note: The key financial access indicators are number of deposit accounts, value of deposit accounts, number of Number of key loan accounts, and value of loan accounts. financial access indicators included in Financial Access 2010 4 3 2 1 0 94 Accounts in commercial banks Bank branches and ATMs Median per 1,000 adults Median per 100,000 adults High-income countries 2,022 701 East Asia 1,756 & Pacific High-income 32 countries 29 East Asia 272 Developing & Pacific 15 countries 737 258 11 Developing 10 countries Deposit Loan Branches ATMs accounts accounts Consumer protection legislation and implementation % of economies: With designated unit within regulatory body 59 With at least one recourse 81 mechanism 45 31 Financial inclusion 54 Average extent mandate of periodic 44 52 disclosure 54 56 % of economies: 54 Average extent 38 30 With strategy document of disclosure 63 for financial industry 40 at opening 17 48 56 With designated unit within regulatory agency 23 Average extent 65 86 54 of fair treatment 56 Average extent 34 59 of regulator's responsibilities High-income Developing East Asia High-income Developing East Asia countries countries & Pacific countries countries & Pacific 50 F I N A N C I A L A CC E S S 2 0 1 0 REGIONAL PROFILE Europe and Central Asia Note: The key financial access indicators are number of deposit accounts, value of deposit accounts, number of Number of key loan accounts, and value of loan accounts. financial access indicators included in Financial Access 2010 4 3 2 1 0 94 Accounts in commercial banks Bank branches and ATMs Median per 1,000 adults Median per 100,000 adults 50 High-income countries 2,022 701 Europe & High-income 1,330 countries 32 Central Asia 29 349 Developing Europe & 18 countries Central Asia 737 258 Developing countries 10 Deposit Loan Branches ATMs accounts accounts Consumer protection legislation and implementation % of economies: With designated unit within regulatory body 59 With at least one recourse 81 mechanism 45 38 Financial inclusion Average extent mandate of periodic 44 42 52 56 disclosure % of economies: 32 Average extent 38 With strategy document 38 of disclosure 63 for financial industry 40 at opening 60 17 48 With designated unit 20 within regulatory agency 23 Average extent 54 of fair treatment 86 Average extent 34 59 65 41 of regulator's responsibilities High-income Developing Europe & High-income Developing Europe & countries countries Central Asia countries countries Central Asia F I N A N C I A L A CC E S S 2 0 1 0 51 REGIONAL PROFILE Latin America and the Caribbean Note: The key financial access indicators are number of deposit accounts, value of deposit accounts, number of Number of key loan accounts, and value of loan accounts. financial access indicators included in Financial Access 2010 4 3 2 1 0 94 Accounts in commercial banks Bank branches and ATMs Median per 1,000 adults Median per 100,000 adults High-income countries 2,022 701 High-income countries 32 31 Latin America 29 & Caribbean 1,140 346 Latin America Developing & Caribbean countries 737 258 14 Developing 10 countries Deposit Loan Branches ATMs accounts accounts Consumer protection legislation and implementation % of economies: With designated unit within regulatory body 59 48 With at least one recourse 81 mechanism 45 Financial inclusion Average extent 67 mandate of periodic 44 52 56 disclosure % of economies: 46 Average extent 38 With strategy document 38 of disclosure 63 for financial industry 40 at opening 44 17 48 With designated unit 33 within regulatory agency 23 Average extent 54 of fair treatment 86 76 Average extent 34 59 39 of regulator's responsibilities High-income Developing Latin America High-income Developing Latin America countries countries & Caribbean countries countries & Caribbean 52 F I N A N C I A L A CC E S S 2 0 1 0 REGIONAL PROFILE Middle East and North Africa Number of key financial access indicators included in Financial Access 2010 4 3 2 Note: The key financial access indicators are number of 1 deposit accounts, value of deposit accounts, number of 94 0 loan accounts, and value of loan accounts. Accounts in commercial banks Bank branches and ATMs Median per 1,000 adults Median per 100,000 adults High-income countries 2,022 701 High-income countries 32 28 29 Middle East & North Africa 818 Middle East & 17 258 North Africa Developing 737 countries 201 Developing countries 10 Deposit Loan Branches ATMs accounts accounts Consumer protection legislation and implementation % of economies: With designated unit within regulatory body 59 With at least one recourse 81 mechanism 45 50 Financial inclusion Average extent mandate of periodic 44 50 52 56 disclosure % of economies: Average extent 38 46 With strategy document of disclosure 63 40 at opening for financial industry 40 17 48 59 With designated unit 23 within regulatory agency 23 Average extent 54 of fair treatment 86 Average extent 34 59 50 40 of regulator's responsibilities High-income Developing Middle East & High-income Developing Middle East & countries countries North Africa countries countries North Africa F I N A N C I A L A CC E S S 2 0 1 0 53 REGIONAL PROFILE South Asia Note: The key financial access indicators are number of deposit accounts, value of deposit accounts, number of Number of key loan accounts, and value of loan accounts. financial access indicators included in Financial Access 2010 4 3 2 1 0 94 Accounts in commercial banks Bank branches and ATMs Median per 1,000 adults Median per 100,000 adults High-income countries 2,022 701 High-income 32 countries 29 Developing countries 737 258 Developing 10 countries South 317 Asia South Asia 7 4 38 Deposit Loan Branches ATMs accounts accounts Consumer protection legislation and implementation % of economies: With designated unit within regulatory body 59 100 With at least one recourse 81 mechanism 45 33 Financial inclusion Average extent mandate of periodic 44 52 56 58 disclosure 83 % of economies: Average extent 38 With strategy document of disclosure 63 for financial industry 40 at opening 29 17 48 With designated unit 42 within regulatory agency 23 92 Average extent 54 of fair treatment 86 Average extent 34 59 46 of regulator's responsibilities High-income Developing South High-income Developing South countries countries Asia countries countries Asia 54 F I N A N C I A L A CC E S S 2 0 1 0 REGIONAL PROFILE Sub-Saharan Africa Note: The key financial access indicators are number of deposit accounts, value of deposit accounts, number of Number of key loan accounts, and value of loan accounts. financial access indicators included in Financial Access 2010 4 3 2 1 0 94 Accounts in commercial banks Bank branches and ATMs Median per 1,000 adults Median per 100,000 adults High-income countries 2,022 701 High-income countries 32 29 Developing countries 737 258 Developing countries 10 Sub-Saharan Sub-Saharan 5 163 Africa 3 Africa 28 Deposit Loan Branches ATMs accounts accounts Consumer protection legislation and implementation % of economies: With designated unit within regulatory body 59 With at least one recourse 81 mechanism 45 81 Financial inclusion Average extent 55 mandate of periodic 44 52 56 disclosure % of economies: 42 56 Average extent 38 With strategy document of disclosure 63 for financial industry 40 at opening 37 17 48 With designated unit 37 within regulatory agency 23 Average extent 71 of fair treatment 86 54 59 47 Average extent 34 of regulator's responsibilities High-income Developing Sub-Saharan High-income Developing Sub-Saharan countries countries Africa countries countries Africa F I N A N C I A L A CC E S S 2 0 1 0 55 S TAT I S T I C A L A N D P O L I C Y TA B L E S TABLE 1 Financial access: Commercial banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 TABLE 2 Financial access: Cooperatives and credit unions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 TABLE 3 Financial access: Specialized state financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 TABLE 4 Financial access: Microfinance institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 TABLE 5 Outreach: ATMs and POS terminals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 TABLE 6 Financial inclusion: Aspects under the purview of the financial regulator . . . . . . . . . . . . . . . . . 67 TABLE 7 Financial inclusion: Areas of reform in 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 TABLE 8 Consumer protection: Compliance monitoring and enforcement by supervisory agency . . . . 73 TABLE 9 Consumer protection: Disclosure requirements at account opening . . . . . . . . . . . . . . . . . . . . . . 76 TABLE 10 Consumer protection: Requirements for periodic disclosure . . . . . . . . . . . . . . . . . . . . . . . . . 79 TABLE 11 Consumer protection: Fair treatment, dispute resolution, and recourse . . . . . . . . . . . . . . . . . . 82 TABLE 12 Small and medium enterprise finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 56 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 1 Financial access: Commercial banks Deposits Loans Outreach Average account Average value Branches per 100,000 adults Accounts per Value (% of value (% of income Accounts per Value (% of (% of income Economy 1,000 adults GDP) per capita) 1,000 adults GDP) per capita) Total Urban Rural Afghanistan 83.85 25.90 .. 3.32 7.79 .. 2.00 0.24 1.76 Albania 1,278.63 56.58 58.38 107.53 36.70 450.35 22.29 .. .. Algeria 736.56 36.05 67.73 .. 23.57 .. 5.30 .. .. Anguilla 4,426.58 .. .. 790.84 .. .. 55.07 36.71 18.36 Antigua and Barbuda 2,971.58 104.24 47.88 579.76 95.18 224.07 27.13 .. .. Argentina 906.29 21.61 31.95 526.33 12.92 32.91 13.20 .. .. Armenia 630.51 14.48 28.90 163.67 16.25 124.92 15.99 .. .. Australia .. 75.18 .. .. 115.67 .. 31.86 24.49 7.37 Austria 2,402.71 50.84 24.95 .. 58.63 .. 27.54 .. .. Azerbaijan 678.32 11.55 22.58 .. 22.16 .. 9.57 4.97 4.60 Bangladesh 316.67 50.04 232.52 41.37 36.88 1,311.74 5.16 2.57 2.59 Belarus .. .. .. .. 37.83 .. 45.00 .. .. Belgium 3,968.95 137.40 41.63 .. 140.96 .. 48.49 .. .. Benin 99.85 .. .. .. .. .. 2.89 .. .. Bolivia 337.50 41.74 195.49 75.60 24.78 518.03 6.94 5.78 1.16 Bosnia and Herzegovina .. 49.74 .. 338.29 55.84 195.69 19.95 .. .. Botswana 479.36 30.19 95.00 212.08 14.61 103.91 8.00 5.78 2.22 Brazil 1,065.35 35.55 45.32 533.49 30.88 78.61 12.71 .. .. Bulgaria 2,005.78 51.78 29.81 455.14 71.34 181.02 92.10 .. .. Burkina Faso 67.61 .. .. .. .. .. 1.82 .. .. Burundi 23.35 30.10 2,112.28 3.81 21.36 9,195.09 1.81 0.87 0.93 Cambodia 95.83 34.68 549.34 27.15 25.53 1,427.20 3.92 .. .. Canada .. 117.79 .. .. 95.18 .. 24.11 .. .. Cape Verde 1,137.83 73.92 103.04 184.30 55.92 481.23 28.94 25.12 3.82 Chile 729.76 40.05 71.44 647.26 64.34 129.41 14.92 14.92 .. China .. 206.90 .. .. 143.88 .. .. .. .. Colombia 1,267.44 25.97 29.09 469.75 24.64 74.45 14.30 9.26 5.04 Costa Rica 1,353.83 46.76 46.95 602.52 45.32 102.23 23.30 16.67 6.64 Côte d'Ivoire 75.44 .. .. .. .. .. .. .. .. Croatia 1,441.51 70.10 57.42 .. 71.28 .. 34.54 .. .. Czech Republic 1,739.26 62.91 42.13 .. 46.89 .. 22.17 .. .. Denmark .. 95.46 .. .. 129.50 .. 45.36 .. .. Dominica 1,608.76 130.16 107.22 219.40 78.65 475.08 14.48 7.24 7.24 Dominican Republic .. 28.06 .. 245.09 19.53 116.89 9.98 5.93 4.04 Ecuador 569.24 26.70 68.44 300.60 17.98 87.30 1.61 .. .. El Salvador 825.00 41.03 74.26 341.30 39.06 170.89 9.30 .. .. Estonia 2,669.14 70.95 31.26 985.49 114.55 136.70 18.68 17.81 0.88 Ethiopia 93.59 23.99 456.51 1.70 12.10 12,648.43 1.39 .. .. Finland .. 30.03 .. .. 59.96 .. .. .. .. France 771.99 25.75 40.88 .. 35.83 .. 43.21 .. .. Gambia, The 283.20 .. .. 31.11 .. .. 6.70 4.29 2.41 Georgia 626.63 19.53 37.59 313.19 24.26 93.44 18.57 15.25 3.32 Germany .. 25.61 .. .. 28.13 .. 15.91 .. .. Ghana 332.61 39.49 193.74 .. 27.08 .. 5.11 .. .. Greece 2,951.45 105.23 41.56 1,208.83 94.44 91.08 41.50 .. .. Grenada 2,556.00 135.29 73.68 355.90 112.74 440.93 32.97 15.82 17.14 Guatemala 1,139.58 34.54 52.48 341.75 24.48 124.04 35.75 15.45 20.31 Guinea-Bissau 5.81 .. .. .. .. .. .. .. .. Honduras 758.02 48.73 103.67 335.00 .. .. 1.47 1.47 .. Hong Kong SAR, China .. 381.47 .. .. 192.64 .. 21.19 21.19 .. F I N A N C I A L A CC E S S 2 0 1 0 57 TABLE 1 (CONTINUED) Financial access: Commercial banks Deposits Loans Outreach Average account Average value Branches per 100,000 adults Accounts per Value (% of value (% of income Accounts per Value (% of (% of income Economy 1,000 adults GDP) per capita) 1,000 adults GDP) per capita) Total Urban Rural Hungary 2,058.27 38.06 21.74 .. 58.02 .. 18.31 17.80 0.52 Iceland .. 80.65 .. .. 84.43 .. 37.50 18.35 19.15 India 747.29 55.03 107.86 137.46 40.93 436.09 10.11 3.82 6.29 Indonesia 504.74 36.95 100.76 196.86 26.93 188.28 7.74 .. .. Iran, Islamic Rep. of .. 52.65 .. .. 44.53 .. 29.15 .. .. Ireland 2,181.85 84.36 48.67 .. 180.14 .. 57.27 .. .. Israel 1,055.71 102.28 134.20 926.12 81.94 122.56 19.85 19.49 0.36 Italy 774.99 47.78 71.84 701.10 66.83 111.07 52.04 .. .. Jamaica 1,149.68 26.96 33.49 201.72 19.36 137.03 6.64 3.66 2.97 Japan 7,172.42 146.24 23.56 177.63 85.08 553.33 12.46 .. .. Jordan 898.81 142.85 244.91 200.64 92.87 713.30 17.79 17.19 0.60 Kazakhstan .. 40.06 .. .. 49.51 .. 2.79 .. .. Kenya 381.62 38.99 178.49 75.48 27.77 642.80 4.38 .. .. Korea, Rep. of .. 61.55 .. .. 67.01 .. 12.27 .. .. Kuwait .. 52.03 .. .. 52.27 .. 16.47 .. .. Kyrgyz Republic 145.59 17.49 170.99 23.31 13.25 808.72 6.45 4.83 1.62 Lao PDR .. 25.53 .. .. 16.87 .. 1.64 .. .. Latvia 1,205.16 55.91 53.80 653.17 90.40 160.51 14.64 .. .. Lebanon 1,371.98 338.49 332.69 519.89 93.38 242.20 28.83 15.67 13.16 Lesotho 254.41 31.32 202.38 38.98 10.56 445.26 2.12 2.12 .. Liberia 102.08 31.76 545.23 3.67 15.76 7,528.90 1.85 1.85 .. Lithuania 4,190.10 34.91 9.83 353.53 52.19 174.25 25.90 .. .. Macedonia, FYR .. 44.74 .. 463.86 41.35 109.29 25.69 25.45 0.24 Madagascar .. 19.90 .. .. 10.84 .. 1.49 .. .. Malawi 163.44 27.94 319.05 16.52 18.45 2,084.29 2.16 1.10 1.06 Malaysia 2,063.33 105.45 72.96 963.60 113.16 167.64 11.44 9.55 1.89 Mali 116.02 .. .. .. .. .. 3.48 .. .. Mauritania .. .. .. .. .. .. 3.89 3.89 .. Mauritius 2,109.04 92.10 56.85 479.24 64.10 174.10 20.11 10.16 9.95 Mexico 1,096.76 15.08 19.38 .. 13.36 .. 14.67 13.22 1.44 Moldova .. 35.47 .. .. 5.90 .. 9.57 9.37 0.20 Mongolia 2,089.32 37.99 24.75 259.66 35.11 184.09 53.99 10.45 43.54 Montserrat 3,680.04 .. .. 246.48 .. .. 54.23 54.23 .. Morocco 265.28 53.08 280.98 .. 51.31 .. 9.92 .. .. Mozambique 140.50 38.40 488.58 .. 26.83 .. 2.89 .. .. Namibia 757.61 38.14 80.38 209.80 46.87 356.74 7.25 7.25 .. Nepal .. 57.62 .. .. 40.70 .. 4.19 .. .. Netherlands 1,765.79 217.89 150.38 1,085.06 322.40 362.11 25.36 .. .. New Zealand .. 57.19 .. .. 131.34 .. 35.41 .. .. Nicaragua .. 38.52 .. .. 28.03 .. .. .. .. Niger 25.07 .. .. .. .. .. .. .. .. Nigeria 461.21 31.69 119.88 .. 28.36 .. 6.42 .. .. Norway .. 82.28 .. .. 84.00 .. 34.49 .. .. Oman 1,042.61 43.70 .. 412.79 47.28 .. 22.61 .. .. Pakistan 229.49 29.72 206.50 34.67 21.67 996.76 8.68 5.97 2.51 Panama 411.92 95.29 328.35 349.66 80.79 327.94 18.52 18.52 .. Papua New Guinea .. 53.93 .. .. 24.05 .. 1.71 .. .. Paraguay 108.74 37.16 521.21 118.58 23.19 298.25 6.78 .. .. Peru 783.37 26.81 49.40 317.22 24.07 109.54 7.31 6.01 1.30 Philippines 499.10 48.61 148.21 .. 26.27 .. 11.81 4.33 7.48 58 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 1 (CONTINUED) Financial access: Commercial banks Deposits Loans Outreach Average account Average value Branches per 100,000 adults Accounts per Value (% of value (% of income Accounts per Value (% of (% of income Economy 1,000 adults GDP) per capita) 1,000 adults GDP) per capita) Total Urban Rural Poland 1,626.41 30.27 21.95 .. 33.93 .. 32.21 .. .. Portugal .. 78.09 .. .. 141.22 .. 68.08 .. .. Puerto Rico 1,300.23 69.57 .. .. 69.21 .. 15.72 .. .. Romania .. 27.42 .. 344.42 32.69 111.97 35.00 29.43 5.56 Russian Federation .. 25.34 .. .. 38.85 .. 2.62 .. .. Rwanda 226.15 16.79 128.48 .. 13.98 .. 1.87 .. .. Senegal 109.35 .. .. .. .. .. 4.05 .. .. Serbia .. 50.17 .. .. 43.89 .. 43.36 .. .. Sierra Leone 98.62 21.47 383.61 9.68 9.83 1,789.61 2.31 1.93 0.38 Singapore 2,236.25 280.88 151.53 914.55 213.43 281.55 10.54 10.54 .. Slovak Republic 1,857.83 62.73 40.03 .. 54.45 .. 26.64 .. .. Slovenia 1,380.42 102.07 85.84 .. 99.20 .. 10.99 .. .. South Africa 839.13 92.92 159.93 .. 95.96 .. 8.00 .. .. Spain 780.47 46.66 70.11 339.46 68.07 235.15 38.19 .. .. Sri Lanka 1,891.74 39.52 27.58 .. 29.86 .. 9.05 .. .. St. Kitts and Nevis 4,366.64 204.20 77.72 663.74 158.04 395.75 57.44 50.68 6.76 St. Lucia 2,504.70 122.28 66.66 373.31 143.37 524.38 18.48 .. .. St. Vincent and the Grenadines 1,690.53 88.40 71.90 256.82 75.68 405.15 15.12 6.30 8.82 Sudan .. .. .. .. .. .. .. .. .. Swaziland 236.11 22.39 157.96 70.15 14.82 351.73 2.85 2.85 .. Sweden .. 136.93 .. .. 152.42 .. 25.87 .. .. Switzerland .. .. .. .. .. .. .. .. .. Syrian Arab Republic 191.47 43.88 354.49 72.94 29.79 631.75 2.42 1.92 0.50 Taiwan, China 5,187.77 172.84 40.04 635.68 136.40 257.87 17.95 17.69 0.27 Tajikistan 30.98 10.28 530.89 .. 8.72 .. 3.91 1.29 2.62 Tanzania .. 28.94 .. .. .. .. 1.84 .. .. Thailand 1,448.84 79.58 70.38 272.45 87.25 410.33 11.04 3.70 7.34 Togo 186.73 .. .. .. .. .. 3.47 .. .. Tunisia 639.66 58.58 120.04 193.46 59.08 400.31 14.40 13.89 0.51 Turkey 1,661.21 41.82 34.59 360.67 31.18 118.80 17.77 .. .. Uganda 173.21 19.01 215.18 25.21 12.88 1,001.65 2.25 2.25 .. Ukraine 3,145.32 22.03 8.14 .. 50.16 .. 2.74 .. .. United Arab Emirates 1,750.65 .. .. .. .. .. 20.85 .. .. United Kingdom 2,923.25 61.32 25.44 .. 80.64 .. 20.74 .. .. United States 2,021.89 43.91 27.30 .. 44.81 .. 36.33 26.64 9.69 Uruguay 529.39 37.55 92.16 428.56 17.81 53.99 12.62 12.62 .. Uzbekistan 914.92 20.63 32.25 .. 20.28 .. 4.25 1.51 2.73 Venezuela, R. B. de 1,246.39 30.98 35.59 .. 21.61 .. .. .. .. Vietnam .. 0.11 .. .. 0.10 .. 3.21 1.18 2.03 Yemen, Rep. of 103.90 24.96 430.57 8.25 7.63 1,658.25 1.80 .. .. Zambia 27.59 18.52 1,248.90 17.81 11.13 1,163.23 3.64 2.58 1.06 Zimbabwe 144.36 85.41 .. 20.53 35.30 .. .. 6.18 0.16 F I N A N C I A L A CC E S S 2 0 1 0 59 TABLE 2 Financial access: Cooperatives and credit unions Deposits Loans Outreach Regulated by Average Branches per 100,000 adults account value Average value supervisory Accounts per Value (% of (% of income Accounts per Value (% of (% of income Economy agency 1,000 adults GDP) per capita) 1,000 adults GDP) per capita) Total Urban Rural Albania Yes .. 0.13 .. 8.17 0.37 59.47 .. .. .. Argentina Yes 0.14 0.01 122.74 6.19 0.04 8.43 0.01 .. .. Australia Yes .. 4.51 .. .. 4.27 .. 6.78 5.71 1.07 Austria Yes 1,529.80 33.12 25.53 .. 32.98 .. 30.62 .. .. Azerbaijan Yes .. .. .. 1.46 0.05 49.97 .. .. .. Belarus No 0.02 0.00 62.35 0.04 0.00 24.04 .. .. .. Belgium Yes .. 0.04 .. .. .. .. .. .. .. Bolivia Yes 185.98 5.20 44.17 17.81 3.78 335.95 2.24 1.34 0.90 Botswana No 8.08 0.12 22.12 7.13 0.10 21.65 .. .. .. Brazil Yes 3.79 0.69 245.71 18.61 0.73 53.51 3.06 .. .. Burundi Yes 81.40 2.00 40.27 12.48 2.22 291.17 2.80 0.61 2.19 Canada Yes .. 13.02 .. .. 12.80 .. 11.80 .. .. Chile Yes 73.43 0.62 11.01 42.58 0.62 19.10 1.48 .. .. Colombia Yes 27.34 0.31 16.08 24.24 0.54 31.41 0.78 0.47 0.31 Costa Rica Yes 370.58 5.28 19.35 191.75 6.66 47.19 8.47 5.31 3.15 Croatia Yes .. 0.11 .. .. 0.12 .. .. .. .. Czech Republic Yes .. 0.38 .. .. 0.38 .. 0.26 .. .. Denmark Yes .. 0.73 .. .. 0.69 .. 2.01 .. .. Dominican Republic Yes .. 4.09 .. 25.17 2.93 170.62 2.82 1.80 1.01 Ecuador Yes 372.06 3.37 13.23 48.15 3.10 93.80 0.36 .. .. El Salvador Yes 23.35 1.06 68.01 12.63 1.74 205.58 0.80 .. .. Estonia No 1.25 0.01 8.13 1.46 0.05 36.46 1.75 0.88 0.88 Finland Yes .. 18.91 .. .. 22.19 .. .. .. .. France Yes 842.05 31.56 45.94 .. 35.24 .. 32.02 .. .. Gambia, The Yes 37.00 .. .. .. .. .. 5.76 2.51 3.25 Georgia Yes 0.15 0.00 39.55 .. 0.01 .. 14.18 14.18 .. Germany No .. 17.01 .. .. 15.80 .. 17.43 .. .. Greece Yes 10.42 1.40 157.01 8.18 1.31 186.71 1.35 .. .. Honduras No .. 1.19 .. .. 2.91 .. .. .. .. Hungary Yes .. 4.24 .. .. 2.26 .. 21.64 8.18 13.46 Iceland Yes .. .. .. .. .. .. 0.40 .. 0.40 India Yes 68.90 6.08 129.25 10.15 4.19 604.43 2.78 0.97 1.82 Ireland Yes .. .. .. .. .. .. 11.74 .. .. Italy Yes 195.00 9.77 58.41 113.09 19.10 196.77 14.22 .. .. Jamaica Yes 982.43 8.31 12.08 23.60 6.39 386.43 2.50 1.17 1.33 Japan Yes .. 25.97 .. .. 14.64 .. 8.55 .. .. Korea, Rep. of Yes .. 19.17 .. .. 14.65 .. 16.12 .. .. Kyrgyz Republic Yes .. .. .. .. 0.51 .. .. .. .. Latvia Yes 8.79 0.04 5.00 4.06 0.05 14.15 .. .. .. Lithuania Yes 34.43 0.66 22.57 .. 0.51 .. 6.26 .. .. Malawi No 12.13 0.03 4.22 30.87 0.34 20.77 .. .. .. Malaysia No 2.78 0.04 19.16 87.26 0.63 10.25 .. .. .. Mexico Yes 7.24 0.33 65.01 .. 0.36 .. 1.58 0.11 1.47 Morocco Yes 112.36 23.11 288.87 .. 18.66 .. 3.82 .. .. Mozambique Yes .. 0.19 .. .. 0.00 .. 0.10 .. .. Nepal Yes .. 0.40 .. .. 0.37 .. .. .. .. New Zealand Yes .. 1.32 .. .. 1.22 .. .. .. .. Papua New Guinea Yes .. 1.51 .. .. 0.98 .. .. .. .. 60 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 2 (CONTINUED) Financial access: Cooperatives and credit unions Deposits Loans Outreach Regulated by Average Branches per 100,000 adults account value Average value supervisory Accounts per Value (% of (% of income Accounts per Value (% of (% of income Economy agency 1,000 adults GDP) per capita) 1,000 adults GDP) per capita) Total Urban Rural Peru Yes .. 0.56 .. 25.43 0.65 36.78 1.46 0.68 0.13 Philippines Yes 6.18 0.11 27.07 .. 0.11 .. 0.20 0.00 0.20 Poland Yes 202.27 2.79 16.26 .. 2.19 .. 11.88 .. .. Portugal Yes .. 6.26 .. .. 4.97 .. 11.85 .. .. Puerto Rico No 372.12 5,517.97 .. .. 5.01 .. .. .. .. Romania Yes .. 0.08 .. .. 0.09 .. 0.37 0.33 0.04 Rwanda Yes .. 1.47 .. 5.92 1.39 406.88 .. .. .. Slovak Republic Yes .. 0.00 .. .. 0.00 .. 0.09 .. .. South Africa Yes .. 0.04 .. .. 0.04 .. .. .. .. Spain Yes 1,797.77 70.68 46.10 429.82 83.39 227.51 75.26 .. .. Sri Lanka No .. 2.31 .. .. 1.75 .. .. .. .. St. Kitts and Nevis No .. .. .. .. .. .. 13.52 13.52 .. Taiwan, China No 176.02 4.17 28.45 10.44 2.61 299.90 1.48 1.25 0.24 Tajikistan No 0.05 0.03 818.50 .. 0.01 .. .. .. .. United Kingdom Yes .. 12.60 .. .. 12.18 .. .. .. .. United States Yes 723.78 8.63 14.99 .. 10.41 .. 13.05 .. .. Uruguay Yes 0.83 0.02 33.25 3.32 0.03 11.58 0.04 0.04 .. Uzbekistan Yes 2.09 0.36 245.55 2.88 0.50 250.05 .. .. .. Vietnam Yes .. 0.00 .. .. 0.00 .. 0.04 .. .. F I N A N C I A L A CC E S S 2 0 1 0 61 TABLE 3 Financial access: Specialized state financial institutions Deposits Loans Outreach Regulated by Average account value Average value Branches per 100,000 adults supervisory Accounts per 1,000 Value (% of (% of income Accounts per Value (% of (% of income Economy agency adults GDP) per capita) 1,000 adults GDP) per capita) Total Urban Rural Algeria No .. 4.54 .. .. .. .. .. .. .. Austria Yes 0.01 0.21 25,514.96 .. 2.05 .. .. .. .. Azerbaijan Yes .. .. .. 0.39 0.04 148.44 0.18 .. 0.18 Bangladesh No 40.02 2.75 101.04 38.52 2.81 107.39 1.26 0.14 1.11 Botswana Yes 421.10 1.21 4.34 16.62 2.32 210.73 1.19 0.95 0.24 Brazil Yes 0.56 0.72 1,753.92 2.20 5.22 3,217.48 1.49 .. .. Burundi Yes 1.04 0.79 1,245.86 5.59 2.30 673.33 0.04 0.04 .. Canada Yes .. 1.47 .. .. 1.41 .. 0.60 .. .. Chile Yes 1,293.17 12.16 12.25 190.14 12.01 82.26 2.66 2.66 .. Colombia Yes .. 1.94 .. 5.27 3.18 856.96 0.01 0.01 .. Costa Rica Yes .. 0.09 103,998.10 0.02 0.43 29,317.22 0.03 0.03 .. Czech Republic Yes 0.75 0.82 1,269.74 .. 0.54 .. 0.07 .. .. Dominican Republic Yes .. 0.55 .. 0.64 0.34 787.96 0.03 0.03 .. Ecuador Yes 100.88 3.16 45.65 43.96 4.14 137.36 1.03 .. .. El Salvador Yes .. .. .. .. 1.15 .. .. .. .. Ethiopia Yes 0.08 0.13 2,710.00 0.15 2.49 28,780.13 0.07 .. .. France Yes 0.55 0.01 31.59 .. 0.12 .. 0.14 .. .. Germany No .. 28.89 .. .. 44.47 .. 19.71 .. .. Greece No 8.48 2.26 311.25 20.52 2.40 136.41 0.04 .. .. Honduras Yes 31.58 0.31 15.87 4.17 .. .. 0.07 0.07 .. Hungary Yes .. 0.12 .. .. 3.00 .. .. .. .. Iceland Yes .. .. .. .. 38.08 .. .. .. .. Iran, Islamic Rep. of Yes .. 8.01 .. .. 11.10 .. 6.09 .. .. Ireland No .. .. .. .. .. .. 27.72 .. .. Japan Yes .. 0.61 .. .. 5.59 .. 0.24 .. .. Jordan No .. .. .. .. 1.77 .. 0.91 .. .. Korea, Rep. of Yes .. 16.78 .. .. 31.56 .. 3.77 .. .. Kuwait Yes .. .. .. .. .. .. 0.10 .. .. Kyrgyz Republic Yes .. .. .. .. 2.59 .. .. .. .. Lesotho Yes 64.96 1.23 31.05 .. .. .. 0.98 0.57 0.41 Macedonia, FYR Yes .. .. .. .. 0.01 3,400.53 .. .. .. Malaysia Yes 1,146.06 13.71 17.08 113.07 12.09 152.60 4.26 .. .. Mexico Yes 63.20 0.15 3.40 .. 0.07 .. 0.75 0.48 0.28 Morocco Yes 34.50 9.62 391.63 .. 11.67 .. 2.17 .. .. Nepal Yes .. 4.91 .. .. .. .. 1.39 .. .. Nigeria Yes .. .. .. .. 0.29 .. 0.26 .. .. Norway No .. .. .. .. 7.36 .. .. .. .. Oman Yes .. 0.03 .. .. 1.28 .. 1.22 .. .. Pakistan Yes 11.32 0.21 29.39 8.37 1.14 216.66 0.52 0.34 0.18 Panama No 351.35 28.23 114.04 62.51 13.37 303.54 4.64 4.64 .. Peru Yes 242.89 4.04 24.02 30.83 0.60 28.20 2.25 0.52 1.74 Philippines Yes 55.60 5.07 138.83 .. 3.27 .. 0.71 0.15 0.56 Portugal Yes .. 6.26 .. .. 4.97 .. 11.85 .. .. Puerto Rico Yes .. 8.62 .. .. 8.14 .. .. .. .. Romania Yes .. .. .. .. .. .. 0.07 0.07 .. Rwanda Yes .. .. .. 0.16 1.82 19,750.08 .. .. .. Sierra Leone Yes .. .. .. .. .. .. 0.03 .. .. Slovak Republic Yes .. 0.25 .. .. 0.55 .. 0.24 .. .. 62 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 3 (CONTINUED) Financial access: Specialized state financial institutions Deposits Loans Outreach Regulated by Average account value Average value Branches per 100,000 adults supervisory Accounts per 1,000 Value (% of (% of income Accounts per Value (% of (% of income Economy agency adults GDP) per capita) 1,000 adults GDP) per capita) Total Urban Rural Slovenia Yes .. 5.43 .. .. 7.59 .. .. .. .. South Africa Yes .. 0.13 .. .. 0.63 .. .. .. .. Spain No 0.01 0.12 21,241.52 0.06 1.40 27,244.42 .. .. .. Sri Lanka Yes 1,016.32 7.76 10.09 .. 2.96 .. 2.65 .. .. St. Kitts and Nevis No .. .. .. .. .. .. 6.76 6.76 .. Swaziland Yes 147.38 3.60 40.69 20.55 5.71 462.61 1.28 1.28 .. Syrian Arab Republic Yes 2.45 0.90 571.29 25.64 1.50 90.55 0.77 0.41 0.36 Taiwan, China No 1,483.83 35.56 28.80 0.56 0.02 42.10 7.11 6.73 0.38 Tajikistan Yes 17.07 1.32 123.64 .. 0.11 .. 1.76 .. .. Tunisia No 503.70 12.17 31.66 .. .. .. 13.00 6.89 6.11 Turkey No .. .. .. 0.02 0.72 44,376.91 0.04 .. .. United States No .. .. .. .. 4.02 .. .. .. .. Uruguay No .. 0.79 .. .. 4.40 .. 0.31 .. .. Venezuela, R. B. de Yes 0.72 .. .. .. .. .. .. .. .. Yemen, Rep. of Yes 37.79 .. .. .. .. .. .. .. .. Zambia Yes 16.59 0.19 21.00 4.57 0.22 88.64 0.41 0.25 0.16 Zimbabwe Yes 34.24 2.11 .. 1.77 1.27 .. 1.06 0.66 0.40 F I N A N C I A L A CC E S S 2 0 1 0 63 TABLE 4 Financial access: Microfinance institutions Deposits Loans Outreach Regulated by Average account value Average value Branches per 100,000 adults supervisory Accounts per Value (% of (% of income Accounts per Value (% of (% of income Economy agency 1,000 adults GDP) per capita) 1,000 adults GDP) per capita) Total Urban Rural Azerbaijan Yes .. .. .. 27.98 0.42 20.06 0.83 0.12 0.70 Bangladesh No .. 3.62 .. 342.77 4.13 17.72 2.36 .. 2.36 Benin Yes 174.07 .. .. 22.10 .. .. 4.55 .. .. Bolivia Yes 171.74 4.98 45.81 53.99 5.02 147.06 4.96 3.18 1.78 Bosnia and Herzegovina Yes .. .. .. .. 2.47 .. 12.60 7.07 5.53 Botswana Yes 3.97 .. 0.71 0.23 .. 6.19 1.11 0.08 1.03 Brazil Yes 1.09 .. .. 0.04 .. 37.13 0.03 .. .. Burkina Faso Yes 100.35 .. .. .. .. .. 4.75 .. .. Burundi Yes 7.35 0.34 75.46 3.74 0.45 199.15 0.47 0.28 0.18 Cambodia Yes 10.63 0.10 14.18 89.99 3.12 52.62 .. .. .. Côte d'Ivoire Yes 95.12 .. .. 4.13 .. .. 2.12 .. .. El Salvador Yes 0.36 0.03 128.60 9.39 0.29 45.50 .. .. .. Ethiopia Yes 50.35 0.67 23.81 50.35 1.43 50.74 0.96 .. .. Gambia, The Yes 166.83 .. .. 5.41 .. .. 12.04 2.09 9.95 Georgia Yes .. .. .. 29.25 0.61 25.10 14.18 14.18 .. Ghana Yes .. 2.00 .. .. 1.16 .. 3.17 .. .. Honduras No .. 0.04 .. .. .. .. 1.25 1.25 .. Indonesia Yes 2.45 0.33 186.68 17.03 0.52 42.39 0.58 .. .. Kenya Yes 8.00 3.06 669.55 5.97 0.13 36.68 0.02 .. .. Kyrgyz Republic Yes .. .. .. .. 4.18 .. .. .. .. Madagascar Yes 33.29 0.33 17.26 8.36 0.52 110.12 2.99 1.04 1.95 Malaysia No .. .. .. 19.03 0.22 16.17 1.55 .. .. Mali Yes 107.11 .. .. 36.07 .. .. 14.76 .. .. Mexico Yes 30.24 0.07 3.12 8.37 0.07 12.35 1.05 0.94 0.11 Morocco Yes .. .. .. .. 0.82 .. .. .. .. Mozambique Yes .. .. .. .. 0.06 .. 0.90 .. .. Nepal Yes .. 0.20 .. .. 0.84 .. 1.94 .. .. Nicaragua Yes .. 1.77 .. .. 4.03 .. .. .. .. Niger Yes 26.83 .. .. 4.26 .. .. 1.64 .. .. Nigeria Yes 34.00 .. .. .. 0.17 .. 2.87 .. .. Pakistan Yes 20.68 0.05 3.87 17.12 0.15 13.79 1.42 .. .. Panama Yes 5.50 0.32 81.89 5.01 0.38 106.90 0.54 0.54 .. Papua New Guinea Yes .. 0.39 .. .. 0.08 .. .. .. .. Peru Yes 84.88 1.90 32.32 75.04 2.40 46.23 3.78 1.57 2.21 Philippines Yes 8.41 0.02 3.73 .. 0.02 .. 0.47 0.04 0.43 Rwanda Yes .. 0.47 .. 11.00 0.59 92.53 .. .. .. Senegal Yes 96.72 .. .. 34.41 .. .. 8.75 .. .. Sierra Leone Yes .. .. .. .. .. .. 0.10 .. .. South Africa Yes .. 0.04 .. .. 0.57 .. .. .. .. Sudan Yes .. .. .. .. .. .. 0.04 0.04 .. Syrian Arab Republic Yes 0.06 .. 8.26 1.13 0.03 37.74 0.06 0.06 .. Tajikistan No .. 0.12 .. .. 0.09 .. .. .. .. Togo Yes 104.26 .. .. 15.78 .. .. 4.25 .. .. Tunisia No .. .. .. 29.77 0.34 15.00 4.48 4.29 0.19 Uganda Yes 22.52 0.12 10.75 8.07 0.33 79.85 0.47 0.47 .. Uzbekistan Yes .. .. .. 1.17 0.02 26.23 .. .. .. Yemen, Rep. of Yes 2.93 .. 1.35 3.27 0.42 228.29 0.27 .. .. Zambia Yes 0.17 0.01 124.03 53.47 0.58 20.22 1.56 1.39 0.18 Zimbabwe Yes .. .. .. 0.76 0.23 .. 1.07 0.85 0.23 64 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 5 Outreach: ATMs and POS terminals Automated teller machines Point-of-sale terminals Per 100,000 Per 1,000 Per 100,000 Per 1,000 Economy adults sq. km. adults sq. km. Afghanistan 0.38 0.09 2.75 0.67 Albania 31.11 27.04 183.45 159.49 Algeria 5.75 0.60 .. .. Anguilla 137.67 .. 3,937.23 .. Antigua and Barbuda 71.81 102.27 1,881.31 2,679.55 Argentina 36.85 4.01 .. .. Armenia 28.71 24.89 111.24 96.45 Australia 156.69 3.52 4,039.64 90.83 Austria 118.86 102.01 4,174.11 3,582.38 Azerbaijan 25.89 20.49 132.33 104.73 Belarus 32.76 13.02 336.04 133.53 Belgium 138.32 407.24 1,193.42 3,513.66 Bolivia 17.53 0.99 .. .. Bosnia and Herzegovina 24.45 15.20 473.03 294.02 Botswana 21.46 0.48 288.68 6.43 Brazil 112.06 18.73 2,247.41 375.56 Bulgaria 80.42 48.87 789.56 479.77 Burundi 0.08 0.16 .. .. Cambodia 4.19 2.30 34.13 18.72 Canada 218.55 6.66 2,556.01 77.93 Cape Verde 38.80 30.27 443.97 346.40 Chile 58.74 10.10 486.07 83.56 Colombia 29.56 8.36 441.06 124.72 Costa Rica 181.52 118.39 1,695.31 1,105.72 Croatia 95.89 64.40 2,284.79 1,534.41 Czech Republic 39.91 46.25 868.98 1,006.95 Dominica 36.21 26.67 1,032.01 760.00 Dominican Republic 27.11 37.58 .. .. Ecuador 12.80 4.27 .. .. El Salvador 27.21 53.96 520.83 1,032.67 Estonia 88.25 23.73 1,345.73 361.90 Ethiopia 0.14 0.06 .. .. Finland 38.31 5.56 64.29 9.33 France 105.27 96.89 2,456.92 2,261.41 Gambia, The 3.04 2.90 .. .. Georgia 37.00 19.27 211.32 110.04 Germany 112.18 228.00 836.53 1,700.24 Ghana 4.77 3.00 .. .. Greece 80.58 60.26 3,848.25 2,877.85 Grenada 47.47 105.88 873.01 1,947.06 Guatemala 21.85 15.92 414.69 302.09 Honduras 23.38 9.38 .. .. Hungary 55.62 52.99 831.30 791.88 Iceland 82.19 2.05 .. .. India 7.29 19.08 67.06 175.55 Indonesia 14.44 13.22 117.89 107.91 Iran, Islamic Rep. of 29.79 9.95 2,038.07 680.42 Ireland 95.74 49.24 2,258.04 1,161.27 F I N A N C I A L A CC E S S 2 0 1 0 65 TABLE 5 (CONTINUED) Outreach: ATMs and POS terminals Automated teller machines Point-of-sale terminals Per 100,000 Per 1,000 Per 100,000 Per 1,000 Economy adults sq. km. adults sq. km. Israel 104.33 254.34 .. .. Italy 97.81 170.82 2,091.02 3,652.04 Jamaica 22.25 38.69 708.42 1,231.95 Jordan 26.27 11.41 .. .. Kazakhstan 52.10 2.31 170.86 7.57 Kenya 8.28 3.21 .. .. Kuwait 53.42 62.63 1,040.14 1,219.42 Lao PDR 3.49 0.58 .. .. Latvia 67.56 21.19 1,219.32 382.49 Lebanon 39.32 117.99 1,382.77 4,149.07 Lesotho 6.68 2.70 .. .. Liberia 1.43 0.32 1.43 0.32 Lithuania 54.23 24.62 1,362.28 618.36 Macedonia, FYR 50.06 32.72 1,476.34 964.92 Malawi 2.65 2.16 4.44 3.61 Malaysia 53.99 31.07 1,063.09 611.81 Mauritius 39.09 187.68 763.80 3,667.49 Mexico 44.80 17.39 592.14 229.84 Mongolia 15.10 0.19 194.13 2.40 Montserrat 54.23 .. 1,111.71 .. Morocco 18.63 9.29 89.93 44.81 Mozambique 5.09 0.79 38.31 5.94 Namibia 30.51 0.49 337.61 5.43 Nepal 1.81 2.27 .. .. Netherlands 64.14 255.43 2,343.41 9,332.41 New Zealand 73.13 9.25 4,268.13 539.81 Norway 56.85 7.20 3,014.45 382.01 Oman 45.91 2.81 .. .. Pakistan 4.06 5.49 48.98 66.16 Panama 40.56 13.03 .. .. Peru 22.26 3.47 53.96 8.42 Philippines 14.25 28.37 .. .. Poland 49.14 51.85 666.71 703.52 Portugal 206.94 203.38 .. .. Puerto Rico 40.23 142.28 1,523.98 5,389.18 Romania 53.21 42.19 540.33 428.39 Russian Federation 76.51 5.65 293.05 21.63 Rwanda 0.46 1.05 1.67 3.81 Serbia 45.10 30.82 978.07 668.37 Sierra Leone 1.14 0.50 1.52 0.67 Singapore 49.83 2,901.31 2,091.42 121,764.90 Slovak Republic 49.34 46.78 713.06 676.03 Slovenia 101.67 88.68 1,871.85 1,632.72 South Africa 52.41 14.55 89,086.84 24,728.07 Spain 154.76 120.47 3,711.27 2,889.09 Sri Lanka 12.29 29.03 .. .. St. Kitts and Nevis 94.61 107.69 2,328.02 2,650.00 St. Lucia 31.33 63.93 902.14 1,840.98 66 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 5 (CONTINUED) Outreach: ATMs and POS terminals Automated teller machines Point-of-sale terminals Per 100,000 Per 1,000 Per 100,000 Per 1,000 Economy adults sq. km. adults sq. km. St. Vincent and the Grenadines 23.94 48.72 656.47 1,335.90 Sudan 2.03 0.21 5.60 0.59 Swaziland 18.68 7.62 81.00 33.02 Sweden 36.63 6.86 .. .. Switzerland 93.06 150.00 1,985.35 3,200.00 Syrian Arab Republic 2.67 1.99 2.22 1.65 Taiwan, China 132.75 787.32 1,141.95 6,772.72 Tajikistan 3.98 1.21 2.11 0.64 Tanzania 3.44 0.91 16.14 4.28 Thailand 71.32 73.42 .. .. Tunisia 17.26 8.75 121.65 61.68 Turkey 44.25 30.92 3,232.79 2,259.17 Uganda 3.29 2.69 4.53 3.71 Ukraine 71.34 49.01 187.17 128.60 United Arab Emirates 99.27 43.05 .. .. United Kingdom 122.84 257.07 2,330.70 4,877.44 United States 175.69 46.39 .. .. Uruguay 30.59 4.49 272.76 40.00 Uzbekistan 1.05 0.47 317.50 142.53 Venezuela, R. B. de 28.19 6.24 .. .. Yemen, Rep. of 2.84 0.69 16.98 4.14 Zambia 6.35 0.58 13.11 1.20 Zimbabwe 7.83 1.51 33.69 6.49 F I N A N C I A L A CC E S S 2 0 1 0 67 TABLE 6 A = Agency is responsible Financial inclusion: Aspects under the purview of the financial regulator A+ = Agency is responsible and has a dedicated team or unit Strategy document Consumer Financial Regulation of Promoting Promoting SME Promoting access to improve financial Economy protection capability microfinance savings access to finance in rural areas inclusion Afghanistan A A+ A A+ A+  Albania A+ A A+ Algeria A+ A+ Anguilla A+ A+ Antigua and Barbuda A+ A+ Argentina A+ A+ A+ A+ A+ A+  Armenia A+ A+ A+ A  Australia A Austria A Azerbaijan A+ A+ A+ A+  Belarus A A A A  Benin A+ A+ A A+ A+  Bolivia A+ A A A+ Bosnia and Herzegovina A+ Botswana A A+ A+ A A+ A+ Brazil A+ A+ A A A  Burkina Faso A+ A+ A A+ A+  Cambodia A A+ A+ A A A Canada A+ A+ Cape Verde A+ A A+ Chile A+ A+ China  Colombia A+ A+ A+  Côte d'Ivoire A+ A+ A A+ A+  Croatia A Czech Republic A+ Denmark A+ A Dominica A+ A+ Dominican Republic A+ Ecuador A+ A+ A  El Salvador A+ A+ A+ A Estonia A+ A+ Ethiopia A A A+ A+ A A+  Finland A+ A+ France A+ A+ A+ A+ Gambia, The A+ A+ A+ A+ A+ A+  Georgia A+ Ghana A+ A+ A+ A+ A+  Grenada A+ A+ Guatemala A+ A+  Guinea-Bissau A+ A+ A A+ A+  Honduras  Hungary A+ A+ A+  India A A A A+ A+  Indonesia A+ A+ A+ A+ A+ A+  Iran, Islamic Rep. of A+ A+ A+  Ireland A+ Israel A+ A+ Italy A+ A+ A Japan A A+ A A A A Jordan A+ Kazakhstan A+ A+  68 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 6 (CONTINUED) A = Agency is responsible Financial inclusion: Aspects under the purview of the financial regulator A+ = Agency is responsible and has a dedicated team or unit Strategy document Consumer Financial Regulation of Promoting Promoting SME Promoting access to improve financial Economy protection capability microfinance savings access to finance in rural areas inclusion Kenya A+ A+ A+ A+  Korea, Rep. of A+ A+ A+ A+ A+ A  Kuwait A A Kyrgyz Republic A A A A A  Lao PDR A+ A +  Lesotho A+ A+ A+ A+ A+  Liberia A A A A A  Macedonia, FYR + Madagascar A+ A+  Malawi A+  Malaysia A+ A+ A+ A+ A+ A+  Mali A+ A+ A A+ A+  Mauritania A+ A+ A+ A+ A+ A+  Mauritius A+ A+ A Mexico A+  Moldova A+ Montserrat A+ A+ Morocco A+ A+ A A  Mozambique A+ A+ A+  Namibia A+ A+ A+  Nepal A A+ A+ A A A+  Netherlands + A Niger A+ A+ A A+ A+  Nigeria A+ A+ A+ A+ A+ A+  Norway A Oman + A A A A A Pakistan A+ A+ A+ A+ A+ A+  Panama A+ Papua New Guinea A+ Paraguay A Peru A+ A+ A+ A+ A+ A+  Philippines A+ A+ A+ A+ A+ A+  Poland A+ A+ A A A A Portugal A+ A+ A+  Puerto Rico A+ A+ A+ A+ Russian Federation A+ A+ A+  Rwanda A+  Senegal A+ A+ A A+ A+  Serbia A+ A+ A+ A+ Sierra Leone A+ A+ A+ A+  Singapore A+ Slovenia A Sri Lanka  St. Kitts and Nevis A+ A+ St. Lucia A+ A+ St. Vincent and the Grenadines A+ A Sudan A+ A+ A+ Swaziland A A A A Sweden A+ Switzerland A Syrian Arab Republic A+ A+ A+ A+ A+  Tajikistan A+ A A+ A+ A+ A+  F I N A N C I A L A CC E S S 2 0 1 0 69 TABLE 6 (CONTINUED) A = Agency is responsible Financial inclusion: Aspects under the purview of the financial regulator A+ = Agency is responsible and has a dedicated team or unit Strategy document Consumer Financial Regulation of Promoting Promoting SME Promoting access to improve financial Economy protection capability microfinance savings access to finance in rural areas inclusion Tanzania A+ A+ A+ A+ A+  Thailand A+ A+ A+ A A+ A+  Togo A+ A+ A A+ A+  Tunisia A+ A+  Turkey A+ Uganda A+ A A+  Ukraine A A United Kingdom + A+  United States A+ A+ Uruguay A+ A+  Uzbekistan A A A A A A  Venezuela, R. B. de A+ A+ A+ A+  Vietnam A+ A+ A+ A  Zambia A A+ A+ A+ A+ A  Zimbabwe A+ A A+ A+ A+ A+  Note: SME = small and medium enterprise. 70 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 7 Financial inclusion: Areas of reform in 2009 Facilitating Limiting Introducing Facilitating access to Enabling Promoting Consumer Financial multiple basic SME access Enabling finance in branchless Revising KYC government Economy protection capability borrowing accounts to finance microfinance rural areas banking requirements transfers Other Afghanistan + + + + Algeria + + + + + + + + Anguilla + Argentina + + + + + Armenia + + + + Austria + + Azerbaijan + + + + + Bangladesh + Belarus + Belgium + + + Benin + + Bolivia + + + + + Bosnia and Herzegovina + Botswana + + + + Brazil + + + Bulgaria + + + + + + Burkina Faso + + Cambodia + + + Canada + + + + Cape Verde + + + Chile + China + Colombia + + + + + + + + Costa Rica + Côte d'Ivoire + + Croatia + + + + Czech Republic + Dominican Republic + + Ecuador + + + + + + + + + + El Salvador + + + + + Ethiopia + + + + + + + + Finland + + France + + + + + Gambia, The + + + + + + + + Ghana + + + + + + Guatemala + + Guinea-Bissau + + Honduras + + Hong Kong SAR, China + Hungary + + + + India + + + + + + + Indonesia + + + + + Iran, Islamic Rep. of + + + + + + Ireland + + F I N A N C I A L A CC E S S 2 0 1 0 71 TABLE 7 (CONTINUED) Financial inclusion: Areas of reform in 2009 Facilitating Limiting Introducing Facilitating access to Enabling Promoting Consumer Financial multiple basic SME access Enabling finance in branchless Revising KYC government Economy protection capability borrowing accounts to finance microfinance rural areas banking requirements transfers Other Israel + + + Italy + + Japan + + Jordan + Kazakhstan + + + + + Kenya + + + + Korea, Rep. of + + + + + + Kuwait + + + + + Kyrgyz Republic + + + + + + Lao PDR + + + Latvia + + + + Lebanon + + + + Lesotho + + + + + + + Liberia + + + + + + + Lithuania + + + + Macedonia, FYR + Madagascar + + + + Malawi + + + + + Malaysia + + + + + + + + + + Mali + + Mauritius + Mexico + + + + + + + Moldova + Montserrat + Morocco + + + + + + Mozambique + + + Namibia + Nepal + + + + + New Zealand + + + Nicaragua + + Niger + + Nigeria + + + + + + + + + + Oman + + + + + + + Pakistan + + + + + + + + + Panama + + Papua New Guinea + + + + Paraguay + + Peru + + + + + + Philippines + + + + + + + + Portugal + + + + + + Puerto Rico + + Russian Federation + + + + Rwanda + + + + + + Senegal + + 72 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 7 (CONTINUED) Financial inclusion: Areas of reform in 2009 Facilitating Limiting Introducing Facilitating access to Enabling Promoting Consumer Financial multiple basic SME access Enabling finance in branchless Revising KYC government Economy protection capability borrowing accounts to finance microfinance rural areas banking requirements transfers Other Serbia + Sierra Leone + + + + Singapore + + + Slovak Republic + + + Spain + + Sri Lanka + + + + + + St. Kitts and Nevis + Sudan + + + + + + Swaziland + + + + + + + Switzerland + + Syrian Arab Republic + + + + + + + Taiwan, China + + + + Tajikistan + + + + + + + + Tanzania + + Thailand + + + + + + Togo + + Turkey + + Uganda + + + + + + Ukraine + + + United Kingdom + + + + + + + United States + Uruguay + + + + + Uzbekistan + + + + Venezuela, R. B. de + + + + + + Vietnam + + + + + Zambia + + Zimbabwe + + + + + + + + Note: KYC = know your customer; SME = small and medium enterprise. F I N A N C I A L A CC E S S 2 0 1 0 73 TABLE 8 Consumer protection: Compliance monitoring and enforcement by supervisory agency ts nt s en ai m e pl tis e at m tc. rch ve r er co s,e a d o op f e e a ro sit re s es ing et be nt s eb er FIs rg ns m lai W m of c ha l e ad l i ce e u p ts , u n ss is nc n om on s at io ce r's ia on ec en m s de pl t i cs i v s e m n g n dc s tig d ex r aw t ion rovi e i pi a e t d s a om tatis ec rt s, inv en n ith ie vio l gp rc or ve op up efu alt ito rt s rt ' ad sh ro a nd cem F Is tor to w pen e of n din n o e s o g r s s e o re p nt er nit s on nf o st o r er d tic ff m ce vid og cu c ti ide vid an no eo to Is to c all ro i nc s, fo s pe o re n ing r ov ro n es lic th s F p / f r p p fi b w ho d ire at e ito r te ry iew ite in ns wa uire ire se pu dr a et qu er rv tio ssue qu po ue Economy Op on ys te On s q Iss ith M Re M M In Ac I Re Re Im W Afghanistan + + + + + + Albania + + + + + + Algeria + + + + + Argentina + + + + + + Armenia + + + + + + + + Australia + + + + + Austria + + + + + + + + Azerbaijan + + + + + + + + + Belgium + + + + + + + + + Benin + Bolivia + + + + + Botswana + + + + + + Brazil + + + + + + Burkina Faso + Cambodia + + + + + + + Canada + + + + + + + + + + Cape Verde + + + Chile + + + + + + + + + + Colombia + + + + + + + + + Costa Rica + + + + Cote d'Ivoire + Croatia + + Czech Republic + + + + + Denmark + + + + Dominican Republic + + + + Ecuador + + + + + + + Estonia + + + + + + + + Ethiopia + + + + Finland + + + + + + + + France + + + + + + + + Gambia, The + + + Ghana + + + + + + + Greece + + + + + + + Guatemala + + Guinea-Bissau + Hungary + + + + + + + + + + 74 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 8 (CONTINUED) Consumer protection: Compliance monitoring and enforcement by supervisory agency ts nt s en ai m e pl se at tc. ch r ti er om ,e ar dv e p fc es e a oo ro ts s i t re s Is e s ing et be n eb er F rg d ns m lai um of ch a lea lic e e u p s, W ns n s is r's anc nn o c om e nt co atio ces m s d e pl i tic s e em ing d tig ex aw ion rovi m tis eiv tis an es nt nd dr es at co ta rec ver o pp p s, i nv e e fu ith a lti v iol gp ito r rt s rt o ' ad sh ro u an d c em F Is to r to w p en e of n din n o te s to g n r s s c e o re p n er ni s o fo to er er d ti ff m ce vid og cu c ti en gs vid rovid an no eo to all fo pe es s to F Is c p ro / i nc w s, n s for r nin p ro p fi n b lic w th ho d ire at e ito r te ry rv ie ei ns wa uire ire se pu dr a Economy et qu er on ys te sit tio ssue q qu po ue ith M Re Op M M In On Ac I Re Re Im Iss W India + + + + + + + + + + Indonesia + + Iran, Islamic Rep. of + + + + + + + + + + + Ireland + + + + + + + + + Israel + + + + + + + Italy + + + + + + + + Japan + + + + + + + + Jordan + + + + Kazakhstan + + + + + + + + + Kenya + + + + + + + Korea, Rep. of + + + + + + + + + + Kuwait + + + + + + + + + + Kyrgyz Republic + + + + + + + Lao PDR + + + + + Latvia + + + + Lesotho + + + + + + + + Liberia + + + + + Lithuania + + + + Macedonia, FYR + + Madagascar + + + + Malawi + + Malaysia + + + + + + + + Mali + Mauritania + + + + + + Mauritius + + + + + + + Mexico + + + + + + + + Moldova + + + + Mongolia + + + + Morocco + + + + + + Mozambique + + + + + + Netherlands + + + + + + + + + Nicaragua + + + + + + + Niger + Nigeria + + + + + + + + + + + Pakistan + + + + + + + Panama + + + F I N A N C I A L A CC E S S 2 0 1 0 75 TABLE 8 (CONTINUED) Consumer protection: Compliance monitoring and enforcement by supervisory agency ts n ts en m e lai ise at om p tc. rch ve r t p er fc ,e ea oo es ad ro sit re s ge s g et be nt s eb er FIs ar din en s ai f h lea lic e um pl s, W s um no sc s s nc nn co m en t co n at i o e s m i s de r ' ia so tig xc aw ion rovi pl s tic e ive i se m i ng a nd es t de dr s at o m t i c r t p , v n n h i e o l p rc sta or e ve ho p ps di n e efu it alt fv i g ito rt rt ad ou an em FIs or o w pen eo din po te rs' os gr rc st st en on e n e i t s o n fo to r e r d t i c ff m r ll c e id gn cu ti n s ide id an no eo o to ov co s, fo ec re ing ov ov es ic th d st FIs e ca r pr y /in w i n sp s fo a rn pr pr fin u bl w e t r e e e e a ho ir er a ito te rv i sit e n w ir ir s p dr Economy et qu on ys te tio ssue qu qu po ue ith M Re Op M M In On Ac I Re Re Im Iss W Papua New Guinea + Paraguay + + + + Peru + + + + + + + Philippines + + Poland + + + + + Portugal + + + + + + + + + + Puerto Rico + + + + + + + + + + + Senegal + Serbia + + Sierra Leone + + + + + Singapore + + + + + + + + Slovak Republic + + + + + Slovenia + + + + South Africa + + + + + + + + + + + + Spain + + + + + + + Sri Lanka + + + + + + + Swaziland + + + + + Sweden + Switzerland + + + + + + Syrian Arab Republic + + Tajikistan + + + + + + Thailand + + + + + Togo + Turkey + + + + + Uganda + + + + Ukraine + + + + United Kingdom + + + + + + + + + + + + United States + + + + + + + Uruguay + + + + + + + Uzbekistan + + + + + + + + + Venezuela, R.B. de + + + + Vietnam + + + + + Yemen, Rep. of + + Zambia + + + + + + + Zimbabwe + + + + + + + + + Note: FI = financial institution. 76 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 9 Consumer protection: Disclosure requirements at account opening s on iti nd co s& st) a ul m ts m er . b tand c ts uc or at ,t e df u m ba und d in rod at ng ing rod ere or r ar s t ici p ef es on int tp sit pr ur er ns t i e, es on m rate edi po u t los of s o nc t t en s i sti ut de cr nd disc se ng ala diz t qu nt m n en an tit es us es to i iti to e re ng ial ins m oc em ed lti d av wr en ted s i d rly ena equ l ire c t na i e pr te ( en an l uir i cia n od ey a pe a d p ce r e si fin ar m el eq l th ies an eth g o e re d o ag nd er sa lan ire al sr ta p r er ed fin an t nt m e aw s om l sta nt ht qu ag nt g t l ini f co rce ula ed a Co perc dr rig e An me Ba ust Pr ngu Pla l re u d, m ti pe lat e g eg um be se a nc ire ire yc wi ra ut l la gu al an rr al ur cri ho ra m s mp qu ne nu tif qu nu Economy he nk in re co ca su es es et No An Re Ge Un Re Ea Fe Ot Lo Re In Fe M M Afghanistan + + + + + + + + + + + Albania + + + + + + + + + + + + Algeria + + + + + + + + + + + + + + Argentina + + + + + + + + + + + + + + Armenia + + + + + + + + + + + + + + Australia + + Austria + + + + + + + + + + + + Azerbaijan + + + + + + + + + + + + + + Belarus + + + Belgium + + + + + + + + + + + + Benin + + + + + Bolivia + + + + + + + + Botswana + + + + + + + + + Brazil + + + + + + + + + Bulgaria + + + + + + + + + + + + + + Burkina Faso + + + + + Cambodia + + Canada + + + + + + + + + + + + + + + Cape Verde + + + + + + + + + + + + + + Chile + + + + + + + + + + + + Colombia + + + + + + + + + + + + Costa Rica + + + + + + + + Cote d'Ivoire + + + + + Croatia + + + + + + + + + + + + + Czech Republic + + + + + Denmark + + + + + + + + + + + + + Dominican Republic + + + + + + + + + + Ecuador + + + + + + + + + El Salvador + + + + + + + Estonia + + + + + + + + + + + + + Ethiopia + + + + + + + + + Finland + + + + + + + France + + + + + + + + + + + + + + + Gambia, The + + + + + + + + + Ghana + + + + + + + + + + Greece + + + + + + + + + + + + + Guatemala + + + + + + Guinea-Bissau + + + + + Honduras + + + + + + + Hong Kong SAR, China + + + + + + + + + + + + + F I N A N C I A L A CC E S S 2 0 1 0 77 TABLE 9 (CONTINUED) Consumer protection: Disclosure requirements at account opening s on iti nd co s& st) a ul m ts m er . b tand c ts uc or at ,t e df g s odu m od t ng ra ere or ar pr ns st ici ef us it pr int re it ins utio pr ur s os te e, on los d of n nc t ep tit Fe ation e ra cre en s i i t nd disc se ng ala d n itu ns diz t od eq ent m en an i s ies to i iti e t ire an lanc ing ial em ho ent ed t oc m ed m ield av wr alt me te en ted s u nc nt e pr d q d( uir ial uir en n y at n e a e a o er si c fin u ar m ge el p eq l th ies an th g um po e nd er sa lan ire al sr ta er sr a er ed fin lt aw om ta nt ht na qu ag nt ag t ini f co ula ba ed s Co perc dr rig An me c e An me Ba ust Pr ngu re gu Re ed, er dp lat e eg do se p nc ire l ire yc wi b ra ut l la gu al rr al ur cri ra m s mp qu ne nu tif qu nu Economy rly he nk in re co ca es su es es et Pla No Re Ge Un Re Ea Ot Lo In Fe M M Hungary + + + + + + + + + + + + + + + India + + + + + + + + + + + + + Indonesia + + + + + + + + + + + + + + Iran, Islamic Rep. of + + + + + + + + + + + Ireland + + + + + + + Israel + + + + + + + + + Italy + + + + + + + + + + + + + + + Jamaica + + + + + + + + + + + Japan + + + + + + + + + Jordan + + + + + + + + + + Kazakhstan + + + + + + Korea, Rep. of + + + + + + + + + + + + + + Kuwait + + + + + + Kyrgyz Republic + + + + + + + + + + + + Lao PDR + + + + + + + + Latvia + + + + + + + + + + + + Lebanon + + Liberia + + + + + + + + + + Lithuania + + + + + + + + + + + + + Macedonia, FYR + + + + + + Madagascar + + + + + + + Malaysia + + + + + + + + + + + + + Mali + + + + + Mauritania + + + + + + + + + + + + + Mauritius + + + + + + + + + + + + + + Mexico + + + + + + + + + + + + Moldova + + + + + + + + + + + + + + Mongolia + + + + Morocco + + + + + + + + + + + + Mozambique + + + + + + Nepal + + + Netherlands + + + + + + + + + + + + + + + New Zealand + + + + + + + + + + + + Nicaragua + + + + + + + + + + + Niger + + + + + Nigeria + + + + + + + + + + + Norway + + + + + + + Oman + + + + + + + + + + + + + + + Pakistan + + + + + + + + + + + + Panama + + + + + + + + + + + + + 78 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 9 (CONTINUED) Consumer protection: Disclosure requirements at account opening s on iti nd co s& st) a ul m s m ct er . b tand c ts or at nt odu ,t te df u m ng ra ing rod ere or ar pr s st ici ef n int tp e sit tio pr ur er ns e, es on m rate edi po tu los of s o nc t en es i sti i t de cr nd disc ng ala d u diz t t s em l in en an tit en es us es to iti to an lanc ing s m oc em ed r cia lti m ield l in av wr en ted s i d rly ena equ ire nt na pr te d ( an uir cia n od ey n u gu me a pe la er e si n u ar q el eq th ies an eth g d fi um po e re d o ag nd er sa re al sr ta sr er fin t nt e aw om l ui e sta nt ht ag nt ag t ini f co ce ula q a ed Co perc dr rig An me An me Ba ust Pr ngu b re d, er dp ti lat e eg be se p a nc ire lan l ire yc wi ra ut l la gu al rr al ur cri ho ra m s mp qu ne nu tif qu Economy nu he nk in re co ca su es es et Pla No Re Ge Un Re Ea Fe Ot Lo Re In Fe M M Papua New Guinea + + + + + + + + + Paraguay + + + + + + Peru + + + + + + + + + + + + + Philippines + + + + + + + + + + Poland + + + + + + + + + + + + + + + Portugal + + + + + + + + + + + + + + Puerto Rico + + + + + + + + + + + + + + Russian Federation + + + + + + + + + Rwanda + + + + + + + + + + + + + + + Senegal + + + + + Serbia + + + + + + + + + + + Sierra Leone + + + + + + + + Singapore + + + + + + Slovak Republic + + + + + + + + + + Slovenia + + + + + + + + + + South Africa + + + + + + + + Spain + + + + + + + + + + + Swaziland + + + + + + + + + + Sweden + + + + + + Switzerland + + + + + + + + + + + + Syrian Arab Republic + + + + + + + + + Taiwan, China + + + + + + + + + + + + + + + Tajikistan + + + + + + + + + + + Thailand + + + + + + + + + + + + Togo + + + + + Tunisia + + + + + + + + + + + Turkey + + + + + Ukraine + + + + + + + + + + United Arab Emirates + + + United Kingdom + + + + + + + + + + + + + United States + + + + + + + + + + + + + Uruguay + + + + + + + + + + + + + + + Uzbekistan + + + + + + + + + + + + + Venezuela, R.B. de + + + + + + + + + + + + + + + + Vietnam + + + + + + + + + + + + Yemen, Rep. of + + + + + + + + + + Zambia + + + + + + + + + + + + + Zimbabwe + + + + + + + + + + + F I N A N C I A L A CC E S S 2 0 1 0 79 TABLE 10 Consumer protection: Requirements for periodic disclosure s u re s ct ts ce d du d uc rio p ro o od e pr p n u te pr io it e s h isp os at it ion gt ed ul ts nd p s d ut n in de c io en cr o no l tit r ca i d r u t pe d m o to tu ins rio tio d ne t d sti te s ts iel d d ge ate he ma pe ial n e ar l in te te ta en o du ey nc rt ce for te er i he la la cs t cia m c na fo lan s in ag nt s re re g a rt re di an ire s e ta d fi d ou nt n im d fo ba de nc ts ts te io fin n tra qu rce d e am clu en en e f in ala er ng lat ar se c ge ted e nt r t in pe m m ch ep pe gu po tb o lr di um ar e ou ula ire ire nt en an du ra r re al st im un ch id al cc ou s te m nu re reg ne qu qu tst nu ov nk co he te es es Economy la te in Am An Ou Ge Un An Re Re Da Sta Ba Ac Ot Pr Fe Fe Al In M Afghanistan + + + + + + + + Albania + + + + + + + + + + + Algeria + + + + + + + + + + + + + + Argentina + + + + + + + + + + + + Armenia + + + + + + + + + + + + + Austria + + + Azerbaijan + + + + + + + + + + + + Belarus + + + + + + + + Belgium + + + + + + + + Benin + + + + + + + Bolivia + + + + + + + Botswana + Brazil + + + + + + Bulgaria + + + + + + + + + Burkina Faso + + + + + + + Canada + + + + + + + + + + + + + + Cape Verde + + + + + + + + + + Chile + + + + + + + + + + + + + + Colombia + + + + + + + + + + + + + + Costa Rica + + + + Côte d'Ivoire + + + + + + + Croatia + + + + + + + + + + + + + Czech Republic + + Denmark + + + + + + + + + + + + + + Ecuador + + + + + + + + El Salvador + + + + + + + + + + + + Estonia + + + Ethiopia + + + + + + + + + + + Finland + + + + + + France + + + + + + + + + + + + + Gambia, The + + + + + + + + + + Ghana + + + + + + + + + + + + + Greece + + + + + + + + + + + + + + Guatemala + + + + + + Guinea-Bissau + + + + + + + Honduras + + + + + + + + + + + + 80 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 10 (CONTINUED) Consumer protection: Requirements for periodic disclosure s u re ts ts uc ce d d uc od io p ro r od e pr p n te pr io it he pu s os lat it ion t dis ed ts g p s lcu d ut n in de on o en cr tio tit i r ca d er du on ed m to to tu ins rio ep d at i sti te ns rn ts iel ed d e pe ial e orm at th l in te ta en ea io du y nc ce at r he la cs t r ge cia e f m c st na fo lan el s in nt re ag a rt re a di an ire r s e d fi ed ou nt n im d fo ba de nc nt ts ts te io fin tra qu rg rce d e am clu en en rce f in ala er ng lat se ge ted ha e nt t in pe m m ep pe gu po tb o lr di um ar c e ou ula ire ire nt en an du ra r re al st im un ch id al cc ou s te m nu re reg ne qu qu tst nu ov nk co he te es es Economy la te in Am An Ou Ge Un An Re Re Da Sta Ba Ac Ot Pr Fe Fe Al In M Hong Kong SAR, China + + + Hungary + + + + + + + + + + + + India + + + + + + + + + + + Indonesia + + + + + + + Iran, Islamic Rep. of + Israel + + + + + + + + + + + Italy + + + + + + + + + + + + + Jamaica + + + + + Jordan + + + + + + Kazakhstan + Kuwait + + + + + + + + + + + + + Kyrgyz Republic + Lao PDR + + + + + Lebanon + + Lithuania + + + Macedonia, FYR + + + + + + + Madagascar + + + + + Malaysia + + + + + + + + + + Mali + + + + + + + Mauritania + + + + + + + + + + Mauritius + + + + + + + + + + + + + + Mexico + + + + + + + + + + + + + + + Moldova + + + Mongolia + + Morocco + + + + + + + + + + Mozambique + + Netherlands + + New Zealand + + + + + + + + + + + + + Nicaragua + + + + + + + + + + + + Niger + + + + + + + Nigeria + + + + + + + + + + + + Norway + + Pakistan + + + + + Panama + + + + + + + + + + + + Paraguay + + + + + + + + + Peru + + + + + + + + F I N A N C I A L A CC E S S 2 0 1 0 81 TABLE 10 (CONTINUED) Consumer protection: Requirements for periodic disclosure s u re ts ts uc ce d d uc od io p ro er od pr p n te pr io it he pu s os lat it ion t dis ed ts g p s lcu d ut n in de on o en cr tio tit i r ca d er du on ed m to to itu ins rio ep d at i te ns rn t ts iel ed d e pe ial s e orm at th l in te ta en ea io du y nc ce at r he la cs t or ge cia e f m c st na lan el s in nt re ag a rt f re a di an re r ns e d fi ed ou nt im d fo ba de nc nt ts ts te io ui fin tra rg rce d e am clu en en rce f in ala er eq ng lat se e ted ha nt t in pe g m m ep pe gu po tb o lr di um ar c e ou ula ire ire nt en an du ra r re al st im un ch id al cc ou s te m nu re reg ne qu qu tst nu ov nk co he te es es la Economy te in Am An Ou Ge Un An Re Re Da Sta Ba Ac Ot Pr Fe Fe Al In M Philippines + + + + + + + Poland + + + Portugal + + + + + + Puerto Rico + + + + + + + + + + + + + + Rwanda + + + + + + + + + + Senegal + + + + + + + Serbia + + + + + + + + Sierra Leone + + + + + + + + + Singapore + Slovak Republic + + + South Africa + + + + + + + Spain + + + + + + + + + + + + + + Switzerland + + + + + + + + + + + + + + Taiwan, China + + + + + + + + + + + + Tajikistan + + + + + + + + + + + + + Thailand + + + + + + + + + Togo + + + + + + + Tunisia + + + + + + + + + + + United Arab + Emirates United Kingdom + + + United States + + + + + + + + + + + + Uruguay + + + + + + + + + + + + + + Uzbekistan + + + + + + + + + + + + Venezuela, R. B. de + + + + + + + + + + + + + + + Vietnam + + + Yemen, Rep. of + + + + + + + + + + + + Zimbabwe + + + + + + + + + + + + + + 82 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 11 Consumer protection: Fair treatment, dispute resolution, and recourse t en cli t of en y rt ch m pa ea es at d br tic rd rte re r ac or n s fo hi rt o pr ep at ta ai tio FI da ing sr nf ith n s es ion nt tu ell se ol o tic ew lie es se es s es ds an ric g i ac ov n ity of c n oc on ur s r ar rs a m pr u i st pr tis m s pr ou sp nt d e ds s re on nt use ds e vic t ai an er en re d pr bu ec cti o bu dv an er pl st - m de d of st rr igh m lle y nfi ize ea ns m ial at m d es ilit lo fo ss on co rh co ate lo re co thor ur tiv io ne ib cia em rt isi ive ro ra iat ed ss p l eli gu fai an ne au ov ce fai us ce ed st oc Economy Tim Fin Un No Un De Re Ab Ge Sy Ac Pr Pr M Afghanistan + + + + + Albania + + + + + + + + Algeria + + + + + Anguilla + + Antigua and Barbuda + + Argentina + + + + + + + Armenia + + + + + + + + Australia + + + + + Austria + + + + + + + Azerbaijan + + + + + + + Bangladesh + Belarus + Belgium + + + + + + + + Benin + Bolivia + + + + + + Bosnia and Herzegovina + Botswana + + + + + + Brazil + + + + + + + + + Bulgaria + + + + + + + + Burkina Faso + Burundi + + + Cambodia + Canada + + + + + + + Cape Verde + + + + + + Chile + + + + + + + + China + Colombia + + + + + + + Costa Rica + + + + + + Côte d'Ivoire + Croatia + + + + + + + + Czech Republic + + + + + + + Denmark + + + + + + Dominica + + Dominican Republic + + + + + + + + + Ecuador + + + + + + El Salvador + + + + + + + Estonia + + + + Ethiopia + + + + + + Finland + + + + + + France + + + + + Gambia, The + + + + + Georgia + Germany + Ghana + + + + + + + + Greece + + + + + + + + + Grenada + + Guatemala + + + + + Guinea-Bissau + F I N A N C I A L A CC E S S 2 0 1 0 83 TABLE 11 (CONTINUED) Consumer protection: Fair treatment, dispute resolution, and recourse t en cli t of en y rt ch m pa ea es at d br tic rd te re r rac r or n s fo hi rt o ep at ta gp ai tio FI da sr nf ith llin n s s on nt tu e se ol o e tic w isi lie s se es es ds an ric g ac e se ov an ity f c sin oc n r s r ar m su pr u o st ur r o m pr tp sp nt d e ds rti res re on nt se co ds vic ai an en re d ve bu u -p cti o bu re an er pl st m de d ad of st igh om lle y nfi ize ns m r ial at m d es ilit fo ss on co ive rh co late lo re co thor ur io ial ne ib em rt isi ive ro ra pt iat ed ss nc eli gu fai ne au ov ce fai us ce ed st Economy oc a Tim Fin Un No Un De Re Ab Ge Sy Ac Pr Pr M Honduras + + + + + + Hong Kong SAR, China + + + + + + Hungary + + + + + + + Iceland + India + + + + + + + + Indonesia + + + + + Iran, Islamic Rep. of + + Ireland + + + + + + Israel + + + + Italy + + + + + + + + + Jamaica + + + + + + + Japan + + + + + Jordan + + + Kazakhstan + + + + + Kenya + + Korea, Rep. of + + + + + + + Kuwait + + + + + Kyrgyz Republic + + + Lao PDR + + + + + + Latvia + + + + Lebanon + Lesotho + Liberia + + + + Lithuania + + + + + + Macedonia, FYR + + Madagascar + + + Malawi + Malaysia + + + + + + + + Mali + Mauritania + + + + + + Mauritius + + + + + + Mexico + + + + + + + + + Moldova + + + + + + + + Mongolia + + Montserrat + + Morocco + + + + + + Mozambique + + + + + + Namibia + + + Nepal + + Netherlands + + + + + + New Zealand + + + + + + + Nicaragua + + + + + + + Niger + Nigeria + + + + + Norway + + + + + Oman + + + + + + + + Pakistan + + + + + + + + + + Panama + + + + + + + + 84 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 11 (CONTINUED) Consumer protection: Fair treatment, dispute resolution, and recourse t en cli t of en y rt ch m pa ea es at d br tic rd rte re r ac or n s fo hi rt o pr ep at ta ai tio FI da ing sr nf ith n s es ion nt tu ell se ol o tic w lie es se es s es ds an ric g i ac se ov n ity of c in oc on ur s r ar a m pr u st ur r tis m s pr tp sp nt d e ds s re on nt use co ds e vic ai an er en re d r bu -p cti o bu dv re an er pl st m de d of st igh om lle y nfi ize ea ns m r ial at m d es ilit fo ss on co rh co ate lo re co or ur tiv io ial ne ib em rt isi ive ro h ra iat ed ss nc p l eli t gu fai ne au ov ce fai us ce ed st Economy oc a Tim Fin Un No Un De Re Ab Ge Sy Ac Pr Pr M Papua New Guinea + Paraguay + + + + Peru + + + + + + + + + Philippines + + + + + + + Poland + + + + + + + Portugal + + + + + + Puerto Rico + + + + + + + Romania + Russian Federation + + Rwanda + + + + + Senegal + Serbia + + + + + + Sierra Leone + + + + + Singapore + + + + + Slovak Republic + + + + + Slovenia + + + + + South Africa + + + + + + + + + + Spain + + + + + + + Sri Lanka + + + St. Kitts and Nevis + + St. Lucia + + St. Vincent and the Grenadines + + Sudan + Swaziland + + + + + Sweden + + + + + + + Switzerland + + + + + Syrian Arab Republic + Taiwan, China + + + + + + + + + + Tajikistan + + + + Tanzania + Thailand + + + + + + + + Togo + Tunisia + + + + + + + Turkey + Uganda + + + + Ukraine + United Arab Emirates + United Kingdom + + + + + + + + United States + + + + + + Uruguay + + + + + + + Uzbekistan + + + + + + + Venezuela, R. B. de + + + + + + + + + Vietnam + + + + Yemen, Rep. of + + + + + Zambia + + + + + + + Zimbabwe + + + + + + + + Note: FI = financial institution. F I N A N C I A L A CC E S S 2 0 1 0 85 TABLE 12 Small and medium enterprise finance Agency monitors the level of lending to SMEs SME definition SME lending No, but Number of Yes, Yes, another employees Loan size (max. in Value of loans (% Economy regularly irregularly No agency does (max.) Sales (max. in USD) USD) of GDP) Afghanistan + 100 995,355.00 .. 2.25 Albania + + 249 2,632,185.00 .. 11.30 Algeria + .. .. .. .. Anguilla + .. .. .. .. Antigua and Barbuda + .. .. .. .. Argentina + .. 23,900,000.00 .. 1.28 Armenia + 100 .. .. 4.36 Australia + .. .. 1,559,833.00 15.33 Austria + .. .. .. .. Azerbaijan + + 5 124,411.60 311,029.10 .. Bangladesh + 150 .. .. 17.35 Belarus + .. .. .. .. Belgium + + .. .. .. 21.50 Benin + .. .. .. .. Bosnia and Herzegovina + .. .. .. .. Botswana + + 100 698,301.00 .. 0.42 Brazil + .. .. .. 3.77 Bulgaria + .. .. .. .. Burkina Faso + .. .. .. .. Cambodia + .. .. .. .. Canada + 499 43,700,000.00 4,374,069.00 .. Cape Verde + 51 1,889,713.00 .. 0.60 Chile + + .. .. .. .. China .. .. .. 48.65 Colombia + + 200 .. .. .. Costa Rica + + .. 540,000.00 .. 4.29 Côte d'Ivoire + .. .. .. .. Croatia + 250 .. .. .. Czech Republic + .. .. .. .. Denmark + .. .. .. .. Dominica + .. .. .. .. Dominican Republic + + .. .. 13,878.58 .. Ecuador + .. .. .. 2.87 El Salvador + 50 1,000,000.00 .. 5.77 Estonia + 50 4,340,278.00 1,388,889.00 30.98 Ethiopia + .. .. .. .. Finland + .. .. .. .. France + .. 69,400,000.00 .. 10.64 Gambia, The + .. .. .. .. Georgia + .. .. .. 5.54 Germany + 250 73,500,000.00 .. .. Ghana + 30 2,129,472.00 .. .. Greece + 250 69,400,000.00 .. .. Grenada + .. .. .. .. Guatemala + .. .. 19,604.11 0.51 Guinea-Bissau + .. .. .. .. Honduras + + .. .. .. .. Hong Kong SAR, China 100 .. .. 0.77 86 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 12 (CONTINUED) Small and medium enterprise finance Agency monitors the level of lending to SMEs SME definition SME lending No, but Number of Yes, Yes, another employees Loan size (max. in Value of loans (% Economy regularly irregularly No agency does (max.) Sales (max. in USD) USD) of GDP) Hungary + 250 69,400,000.00 .. 11.89 India + .. .. .. 4.34 Indonesia + + .. 4,812,349.00 .. 0.67 Iran, Islamic Rep. of + 50 .. .. 5.94 Ireland 249 .. .. .. Israel + .. .. .. .. Italy + 20 .. .. 11.42 Jamaica + .. .. .. .. Japan + .. .. .. 35.90 Jordan + .. .. .. 10.18 Kazakhstan + 250 .. .. 6.42 Kenya + .. .. .. .. Korea, Rep. of + 1,000 117,000,000.00 .. 37.39 Kuwait .. .. 868,702.80 .. Lao PDR 99 117,425.50 .. .. Latvia + 250 .. .. 42.23 Lebanon + + .. 5,000,000.00 .. .. Liberia + 16 262,500.00 155,000.00 2.34 Lithuania + + 249 55,600,000.00 .. .. Macedonia, FYR + .. .. .. .. Madagascar + .. 2,555,968.00 .. .. Malawi + .. .. .. .. Malaysia + 150 7,093,199.00 .. 17.43 Mali + .. .. .. .. Mauritania + .. .. .. .. Mauritius + .. .. .. .. Mexico + 250 18,500,000.00 .. .. Moldova + 249 4,500,622.00 .. .. Mongolia + 199 1,043,264.00 .. 6.39 Montserrat + .. .. .. .. Morocco + .. 6,205,707.00 124,114.10 10.39 Mozambique + .. .. .. .. Namibia + + .. .. .. .. Netherlands + .. 73,500,000.00 .. 53.86 New Zealand + 19 .. .. .. Nicaragua + + .. .. .. .. Niger + .. .. .. .. Nigeria + 250 .. .. .. Norway + .. .. .. .. Oman 99 5,201,561.00 .. .. Pakistan + 250 .. .. 2.54 Panama + .. 2,500,000.00 .. 3.25 Peru + .. .. 9,961.79 1.09 Philippines + .. .. .. .. Poland + 250 .. .. 7.81 Portugal + 249 .. .. 52.00 Puerto Rico + .. .. .. .. Russian Federation + 250 31,500,000.00 .. 5.23 F I N A N C I A L A CC E S S 2 0 1 0 87 TABLE 12 (CONTINUED) Small and medium enterprise finance Agency monitors the level of lending to SMEs SME definition SME lending No, but Number of Yes, Yes, another employees Loan size (max. in Value of loans (% Economy regularly irregularly No agency does (max.) Sales (max. in USD) USD) of GDP) Rwanda + .. .. .. .. Senegal + .. .. .. .. Serbia + 250 13,900,000.00 .. .. Sierra Leone + .. .. .. .. Singapore + .. .. .. 14.96 Slovak Republic + .. .. .. .. Slovenia + 250 48,600,000.00 .. .. South Africa + .. 47,200,000.00 885,094.30 10.71 Spain + 250 13,900,000.00 .. .. St. Kitts and Nevis + .. .. .. .. St. Lucia + .. .. .. .. St. Vincent and the Grenadines + .. .. .. .. Sudan + 10 .. .. .. Switzerland + + .. .. .. .. Syrian Arab Republic + .. .. 107,048.00 .. Taiwan, China + + 200 2,420,099.00 .. 24.81 Tajikistan + .. .. 12,069.40 0.36 Thailand + 200 .. .. 30.67 Togo + .. .. .. .. Tunisia + 300 .. .. .. Turkey + + .. .. .. 7.38 Uganda + .. .. .. .. Ukraine 50 8,984,449.00 .. .. United Arab Emirates + .. .. .. .. United Kingdom + 250 35,500,000.00 .. .. United States + .. .. 1,000,000.00 4.93 Uruguay + 100 3,323,292.00 .. 6.86 Uzbekistan + 100 .. .. 4.39 Venezuela, R. B. de + + .. .. .. .. Yemen, Rep. of + .. .. .. .. Zambia + + 50 49,543.12 .. .. Zimbabwe + + 20 .. 50,000.00 .. 88 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 13 Consumer protection legislation G E F O General consumer protection Consumer protection law with Consumer protection regula- Other types of consumer law without explicit reference explicit reference to financial tions within the framework of protection regulation to financial services services financial sector legislation  Afghanistan X X X O There is no specific law, but regulations exist that can be enforced in cases of violation of laws or regulations. Albania X   X E Law No. 9902 on Consumers' Protection (2008). The law contains provisions on consumer credit. F Regulation No. 05 on the Consumer Credit and Mortgage Credit for Households (2009); Regulation No. 59 on the Transparency of Banking and Financial Products and Services (2008) Algeria    X G Name of law not provided. E Law N°09–03 of 25 February 2009 on Consumer Protection (2009) F Regulation N°09–03 of 26 May 2009 Establishing General Rules on Banking Conditions Applicable to Bank Operations (2009) Anguilla X X X X Antigua and X X X X Barbuda Argentina X    E Laws 24240 and 26361 on Consumer Protection (1993 and 2008); Law 25065 on Credit Cards (1999) F Resolution 9, Consumer Protection (2004) O Transparency Regime consisting of Communiqués “A” 4184 and “A” 4191 on Interest Rates in Credit Operations and Relations Between Financial Entities and their Clients (2004) Armenia    X G Consumer Rights Protection Law (2001) E Law on Attraction of Bank Deposits (2008); Law on Consumer Lending (2008) F Regulation 8/01 "Calculation of Annual Percentage Rate: Explanations and Examples" (2009); Regulation 8/02 "Calculation of Annual Percentage Yield of Deposits" (2009); Regulation 8/03 "Information Disclosure by Banks, Credit Organizations, Insurance Companies, Insurance Brokers, Investment Companies, Central Depository and Payment Service Organizations Realizing Remittance (Money) Transfer" (2009); Regulation 8/04 "Minimal Conditions and Principles of Internal Legal Acts Administering Process of Examination of Customers’ Appeals" (2009); Regulation 8/05 "Communication Between Bank and Depositor, Creditor and Consumer: Methods, Conditions and Minimal Requirements" (2009) Australia X    O ASIC (Australian Securities and Investments Commission) administers the regulatory system for consumer protection for deposit–taking activities (i.e., transactions or savings accounts); general insurance; life insurance; superannuation; retirement savings accounts; managed investments; securities (i.e., shares and debentures); derivatives (i.e., futures contracts); foreign exchange contracts; and credit. Austria  X  X G Consumer Protection Act (1979) F Banking Act (1993); Insurance Act (1958); Investment Funds Act (1993); Securities Supervision Act (2007) Azerbaijan    X G Law on Protection of Consumers᾽ Rights (1995); Law on Banks (1992); Law on Deposit Insurance (2006); Law on Advertising (1997) E Name of law not provided (2000) F Corporate Governance Standards; Regulation on Credit Allocations in Banks (2004) Bangladesh X X X X Belarus X X X X Belgium     G Law on Business Practices and on Consumer Protection (1991) E Certain provisions in the Law on Business Practices and on Consumer Protection (1991, 2010) are particular to financial services. F Law on Payment Services (2010) O Law on Consumer Credit (1991); Law on Loans and Credit Facilities Secured by a Mortgage (1992) Benin X  X  E Law on the Definition and Repression of Usury (1997) O Notices to Banks and Financial Institutions on Banking Conditions (1992) F I N A N C I A L A CC E S S 2 0 1 0 89 TABLE 13 (CONTINUED) Consumer protection legislation G E F O General consumer protection Consumer protection law with Consumer protection regula- Other types of consumer law without explicit reference explicit reference to financial tions within the framework of protection regulation to financial services services financial sector legislation Bolivia  X  X G Constitution (2009) F Rules for Customer Service and Users (of Financial Services) (2010) Bosnia and X  X X Herzegovina E Consumer Protection Law of Bosnia & Herzegovina (2006) Botswana    X G Consumer Protection Act (1998). The Consumer Protection Act is under the Ministry of Trade and Industry. E Banking Act, Chapter 46:04 (1995). The Banking Act has selected sections which cover consumer protection issues. F Banking Act, Chapter 46:04 (1995) Brazil    X G Law 8.078, Consumer Defense Code (1990). Law 8.078 is a general consumer protection law with an explicit reference to financial services. However, it does not have specific instru- ments for handling financial services. E Law 8.078, Consumer Defense Code (1990). Concerning financial services, all financial institutions must also comply with National Monetary Council (CMN) and Central Bank of Brazil regulations on (i) transparency of information in credit contracts, which must include all interest and costs charged in the normal course of the operation, the monthly and annual equivalent effective interest rate (Circular 2,905/1999, as modified by Circular 2,936/1999); and (ii) portability of client information (Resolution 2.835/2001), in addition to those Resolutions listed in Section F. F Resolution 3.401, Portability of Credit (2006); Resolution 3.402, Portability Of Wages, Salaries, Pensions and Similar Earnings (2006); Resolution 3.477, Mandatory Ombudsman in Financial Institutions (2007); Resolutions 3.516 and 3.518 and Circular 3.371, Charging of Service Fees (2007); Resolution 3.517, Obligation to Inform Ahead of Extending Credit the Total Cost of the Operation Expressed in the Form of an Annual Percentage Rate, as well as Taxes and Fees (2007); Resolution 3.694, Establishing that Contracts Should Be Clear and Disclose All Information Necessary for the Consumer's Decision (2009) Bulgaria     G Law on Protection of the Consumers (2006) E Law on Consumer Credit (2010) F Law on Credit Institutions (2006); Law on Public Offering of Securities (1999) O Law on Payment Services and Payment Systems (2009); Law on Distance Provision of Financial Services (2007); Law on Bank Deposit Guarantee (1998); Law on Markets in Financial Instru- ments (2007) Burkina Faso X  X  E Law on the Definition and Repression of Usury (1997) O Notices to Banks and Financial Institutions on Banking Conditions (1992) Burundi X X   F Banking Law N°1/017 (2003); Decree N°100/203 (2006). These are regulations that apply to the supervision of the financial sector. There is no specific consumer protection law. O Business Code (1996) Cambodia X X  X F Law on Banking and Financial Institutions (1999) Canada  X  X G The Government of Canada’s Budget 2009 and Budget 2010 included measures related to consumer protection. Further information on these measures can be found at: www. budget.gc.ca/2010/home–accueil–eng.html, Chapter 3. F The Financial Consumer Agency of Canada Act (2001). Other provisions can be found within financial institutions' statutes. Cape Verde X X X X Chile  X X  G Law No. 19.496, Rules on Protection of Consumer Rights (1997); Law No. 19.628, Protection of Privacy (1999) O DFL N°3, General Banking Act (1997). The General Banking Act gives broad power to the Superintendency of Banks, including interpreting the law and enforcing it by establishing norms of banking consumer protection. In the updated norms issued by this superindentency, the following issues are addressed in the "Updated Compilation of Rules (RAN)": Chapters 1–3 on classification and solvency; 18–14 on transparency of information to the public; 19–9 on information to the public; and 7–1 on interest and adjustments. 90 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 13 (CONTINUED) Consumer protection legislation G E F O General consumer protection Consumer protection law with Consumer protection regula- Other types of consumer law without explicit reference explicit reference to financial tions within the framework of protection regulation to financial services services financial sector legislation China X X X X Colombia X    E Law 1328, Title I: Financial Consumer Protection (2010). Financial consumer protection in Colombia is a constitutional matter, covered by Articles 333, 335, and 78. Before June 2009, general rules on financial matters were addressed in the Financial System Organic Statute, Articles 72, 97, 98, 99, and 100. Law 1328, Title I, which came into effect July 2010, explicitly refers to financial consumer protection. F Original Statute of the Financial System (1993); Law 1328, Title I: Financial Consumer Protection (2010) O Basic Legal Circular, Title I, Chapter VI: Rules on Competition and Consumer Protection (1996 and subsequent updates) Costa Rica X  X  E Law of Promotion of Competition and Effective Consumer Protection (1995). The Law of Promotion of Competition and Effective Consumer Protection specifically establishes regulations for credit card issuers concerning information on users of its services. Additionally, there is regulation on the disclosure of information and the advertisement of financial products whose compliance is monitored by the General Superintendent of Financial Institutions. O Regulation of the Law of Promotion of Competition and Effective Consumer Protection (1996) Côte d'Ivoire X  X  E Law on the Definition and Repression of Usury (1997) O Notices to Banks and Financial Institutions on Banking Conditions (1992) Croatia  X  X G Customer Protection Act (2007) F Credit Institutions Act (2009); Act on Leasing Insurance (2007); Customer Credit Act (2007) Czech    X Republic G Act No. 634/1992 Coll., Consumer Protection Act (1992) E Act No. 321/2001 Coll., Conditions for Negotiating a Consumer Loan (2001) F Act No. 256/2004 Coll., Capital Market Undertakings Act (2004) (contains provisions regulating information disclosure to consumers); Act No. 189/2004 Coll., On Collective Investment Schemes (2004); Act No. 37/2004 Coll., On Insurance Contract (2004); Act No. 38/2004 Coll., On Insurance Intermediaries and Loss Adjusters (2004); Act No. 284/2009 Coll., Payment System Act (2009); Act No. 40/1964 Coll., Civil Code (1964, amended by 2002/65/EC); Act No. 229/2002 on the Financial Arbitrator (2002) Denmark X X   F Good Business Practice Act (2009) O Executive Order on Investor Protection in Connection with Securities Trading (2009) Dominica X X X X Dominican     Republic G General Law on Consumer Protection (2005) E Monetary and Financial Law, Article 52 (2002) F Regulation for Protection of Users of Financial Services (2006) O Law 288–05, Regulation of Credit Information Bureaus and Protection of Client Information, including Norms for Electronic Payments (2005) Ecuador    X G Original Law on Consumer Protection (2000) E Law on Regulation of Maximum Effective Cost of Credit (2007) F Banking Board Resolution No. 306 (2006) El Salvador X   X E Law of Consumer Protection (1996). The regulation includes aspects of financial services but also of goods and services in general. F Regulation of the Law of Consumer Protection (1996) Estonia  X X X G The Consumer Protection Act (2004); The Law of Obligations Act (2002); The Securities Market Act (2002); Credit Institutions Act (1999); Insurance Activities Act (2005); Investment Funds Act (2004); Funded Pensions Act (2004); Payment Service Providers and Electronic Money Institutions Act (2010). Different rules aimed at protecting financial consumers can be found in different legal acts, mainly from the Securities Market Act and the Law of Obligations Act. The primary approach has been service–centered, where the rules related to financial services can be found from the specific law of the financial service. F I N A N C I A L A CC E S S 2 0 1 0 91 TABLE 13 (CONTINUED) Consumer protection legislation G E F O General consumer protection Consumer protection law with Consumer protection regula- Other types of consumer law without explicit reference explicit reference to financial tions within the framework of protection regulation to financial services services financial sector legislation Ethiopia X X X X O A complaint handling framework that will enable the amicable settlement of complaints from customers of banks, microfinance institutions, and insurance companies is being implemented. Finland X    E Consumer Protection Act (1978) F Act on Credit Institutions (2007) O Act on Guarantees and Third–Party Pledges (1999). Several acts include provisions on consumer protection matters. The most important acts are mentioned here. Both the Finnish Financial Supervisory Authority (FIN–FSA), as well as the Finnish Consumer Agency have published guidelines covering different subjects on financial services. France     G Consumer Code (2010) E Consumer Code (2010) F Ordinance of 21 January 2010 on the creation of the Prudential Supervisory Authority (2010) O Orders from the Ministry of Economy and Finance that are not part of the Consumer Code also specify rules for informing customers and the general public on the terms and pricing applicable to the management of a deposit account or a payment account, on the manner of relations between payment service providers and their clients in terms of disclosure requirements to users of payment services, on identifying key provisions to be included in agreements on deposit accounts and contracts on payment services, and on the condi- tions of remuneration from funds received by credit institutions. Gambia, The    X G Consumer Protection and Competition Act (2009) E Banking Act (2009) F Banking Act (2009) Georgia X X X X Germany X X X X Ghana X X X X O No explicit laws are in place but the Banking Act (2004) vests Bank of Ghana with the responsibility for dealing with ''unlawful and improper practices'' by banks. Greece    X G Law 2251 on the Protection of the Consumer (1994) E Law 2251 on the Protection of the Consumer (1994) F Bank of Greece Governors Act 2501 (2002). The Bank of Greece Governors Act 2501/2002 lays out credit institutions' disclosure requirements to retail customers with respect to the terms and conditions governing banking transactions. Grenada X X X X Guatemala  X X  G Decree No. 006: Consumer Protection Act (2003) O Law on Access to Public Information (2008) Guinea-Bissau X  X  E Law on the Definition and Repression of Usury (1997) O Notices to Banks and Financial Institutions on Banking Conditions (1992) Honduras X  X X E Rules to Strengthen Transparency, Financial Literacy and Protection of the Financial Consumer in Regulated Institutions (2009) Hong Kong X X X  SAR, China O Code of Banking Practice (1997). While the Hong Kong Monetary Authority (HKMA) has a general duty to “provide a measure of protection to depositors” under the Banking Ordi- nance (BO), there is no explicit mandate with respect to consumer protection. However, HKMA, as a banking regulator, does have an interest in encouraging standards of good banking practice whereby authorized institutions (AIs) act fairly and reasonably in relation to their customers. The good banking practices to promote a fair and transparent rela- tionship between AIs and their customers are currently embodied in the Code of Banking Practice (the Code). The Code is a nonstatutory code issued on a voluntary basis jointly by the industry associations and endorsed by HKMA. The Code sets out the minimum standards that AIs should follow in their dealings with personal customers. HKMA monitors the AIs’ compliance with the Code. 92 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 13 (CONTINUED) Consumer protection legislation G E F O General consumer protection Consumer protection law with Consumer protection regula- Other types of consumer law without explicit reference explicit reference to financial tions within the framework of protection regulation to financial services services financial sector legislation Hungary X X  X F Act CXXXV on the Hungarian Financial Supervisory Authority (2007). There are specific consumer protection matters in the procedures, laws, and government decrees of the Hungar- ian Financial Supervisory Authority. Iceland X X X X India   X  G Consumer Protection Act (1986) E Consumer Protection Act (1986) O Banking Ombudsman Scheme (2006) Indonesia  X  X G Consumer Protection Act (1999) F Bank Indonesia Regulation No.7/6/PBI/2005, Transparency in Bank Product Information and Use of Customer Personal Data (2005); No.7/7/PBI/2005, Resolution of Customer Complaints (2005) Iran, Islamic  X  X Rep. of G Consumer Protection Law (2009). The Consumer Protection Law is a general law that covers many areas, including banks. F Banking Law (1983). The Banking Law includes a clause referring to consumer protection. Ireland X   X E The following Web site contains a list of legislation relevant to the role of the Central Bank of Ireland in relation to the protection of consumers: www.financialregulator.ie/processes/ consumerprotection/legislation. F Consumer Protection Code (2006); Code of Conduct on Mortgage Arrears (2009); Code of Conduct for Business Lending to SMEs (2009) Israel    X G Banking (Service to Customer) Law, 5741–1981 (1981); Banking Rules (Customer Service), Proper Disclosure and Presentation of Documents (1992); Banking Rules (Customer Service), Advertisements Geared to Minors (1995); Banking Rules, Proper Disclosure via Electronic Means; Banking Rules, Bank Accounts; Banking Rules, Form of General Terms for Managing an Ac- count; Banking Rules, Unreasonable Refusal to Open an Account; Regulation 402, The Business Day in Banking Corporations; Regulation 417, Activity of a Banking Corporation in a Closed System; Regulation 419, Retention of Documents; Regulation 403, Benefits to Customers; Regulation 404, Benefits to Customers' Employees; Banking Ordinance, Joint Account and Joint Safe-deposit Boxes; Regulation 434, Joint Accounts "Survivors" Clause; Regulation 416, Minors' Accounts; Regulation 406, Banking Services for New Immigrants; Regulation 435, Telephone Instructions; Regulation 407, Investing on a Customer's Account without his Explicit Agreement; Regulation 325, Management of Credit Facilities in Current Accounts; Regulation 432, Transferring Activity and Closing a Customer's Account E Payment Services: Regulations on Banking (1992); Credit Cards Law, 5746–1986 (1986); Regulation 470 on Credit Cards; Regulation 439, Debits by Authorization F Loans for Dwellings Law (1992); Regulation 451, Procedures for Giving Dwelling Loans; Regulation 452, Loan Management Procedures; Banking Ordinance, Section 13; Banking Order (fee for early repayment of mortgages) (2002); Regulation 454, Early Repayment Fee on a Non-dwelling Loan; Execution Law, Utilizing the Mortgage and Protecting the Apartment (1967); Execution Law, Amendment 29, Amendment of Section 38 and Transitory Regulation (2009); Regulation 409, Charging Customers for Legal Fees; Submitting Information to the Debtors; Clarification with Regard to Collecting Debts via External Lawyers; Law of Guarantees (1967); Regulation 453, Third-Party Guarantees for a Banking Corporation; Guarantees for Homebuy- ers; The Sales (Assurance of Homebuyers’ Investments) Act, 5735–1974; Regulation 326, Close-end Project Finance, Bank Charges and Interest Rate; The Banking Rules (Customer Service) (Bank Charges), 5768–2008 (2008); Banking Regulations (1990); Operating Days, Retrieval of Data by Customers and ATMs; Regulation 441, Retrieval of Data by Customers; Regulation 442, Cash Withdrawals from ATMs; Dormant Accounts; Banking Law, Sections 1 and 13B; Banking Order (2000); Investing Dormant Deposits; Regulation 413, Losing Contact with Renters of Safe-deposit Boxes; Checks without Cover Law, 5741–1981 (1981); Law on Anti-Money Laundering (AML) (2000); Prohibition on Money Laundering (The Banking Corporations' Require- ment regarding Identification, Reporting, and Record-Keeping for the Prevention of Money Laundering and the Financing of Terrorism) Order, 5761–2001 (2001); Obeying the Transitional AML Regulations; Proclamation on the Prohibited Association; Clarifications and Interpretations on Anti-Money Laundering and the Combating the Financing of Terrorism (AML-CFT); Law on CFT (2005); Regulations on CFT (proclamation on the organization on foreign terror or on an activator of foreign terror) (2008); Regulations on CFT (permit to do purchasing activities) (2006) Italy    X G Consumer Code (2005) E Legislative Decree No. 385/1993 (Consolidated Banking), Title VI, Disclosure of Terms and Conditions of Contract (1993); Consumer Code, Part III, Title III, Chapter I, Section IV–a, Distance Marketing of Consumer Financial Services (2005); Legislative Decree No. 11/2010, Transposition of the Payment Services Directive (2010) F Provisions on the Transparency of Banking and Financial Operations and Services (2010) Jamaica    X G Consumer Protection Act (2005); Fair Competition Act (1993) E Credit Reporting Act (2010). Some consumer protection issues will be addressed under the new Credit Reporting Act. However, consumer protection is generally dealt with under the Consumer Protection Act and the Fair Competition Act, which are respectively administered by the Consumer Affairs Commission and the Fair Trading Commission. F Name of law not provided. F I N A N C I A L A CC E S S 2 0 1 0 93 TABLE 13 (CONTINUED) Consumer protection legislation G E F O General consumer protection Consumer protection law with Consumer protection regula- Other types of consumer law without explicit reference explicit reference to financial tions within the framework of protection regulation to financial services services financial sector legislation Japan    X G Consumer Contract Act (2000); Act on Specified Commercial Transactions (1976) E Act on Sales of Financial Products (2000) F Banking Act (1981); Money Lending Business Act (1983) Jordan X X  X F Banking Law (2000) Kazakhstan X X  X F Name of law not provided. Kenya X X  X F Banking Act (1997). The Banking Act has consumer protection provisions with respect to bank charges, disclosures, credit reference bureaus and interest on nonperforming loans. Korea, Rep. of  X X X G Name of law not provided. Kuwait    X G Name of law not provided. Financial services have to be approved by the Central Bank of Kuwait. E Name of law not provided. F Name of law not provided. Kyrgyz  X   Republic G Law 10.12.1997 on Consumer Protection (1997) F Name of law not provided. O Law 10.12.1997 on Consumer Protection (1997) Lao PDR X X  X F Commercial Bank Laws and Depositor Protection Fund (2000) Latvia  X  X G Consumer Rights Protection Law (1999) F Consumer Credit Regulations (2008) Lebanon  X X X G Consumer Protection Law (2004). The regulations for consumer protection are under the Directorate General for Consumer Protection of the Lebanese Ministry of Economy and Trade. Lesotho X X X  O Financial Institutions Act (1999); Insurance Act (1976). The laws relating to banking and insurance consumer protection are indirect and fall under the Financial Institutions Act and Insurance Act, which requires transparency from practitioners in all its dealings and activities. Liberia X X X  O Central Bank of Liberia Act (1999); New Financial Institutions Act (1999). There are no specific laws or regulations on consumer protection. However, financial consumers are protected under various provisions of the Central Bank of Liberia Act, New Financial Institutions Act as well as various regulations, guidelines and directives. Lithuania     G Law on Consumer Protection (1994) E Law on Payments (2003) F Civil Code (2001) O Law on Consumer Credit (2010) Macedonia,  X X  FYR G Law on Consumer Protection (2004) O Law on Consumer Protection in Consumer Credit Contracts (2007) 94 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 13 (CONTINUED) Consumer protection legislation G E F O General consumer protection Consumer protection law with Consumer protection regula- Other types of consumer law without explicit reference explicit reference to financial tions within the framework of protection regulation to financial services services financial sector legislation Madagascar X X  X G A draft law on consumer protection is ready to be adopted by Parliament. F Law No. 95–030 of February 22, 1996 on the Activity and Supervision of Credit Institutions (1996); Law No. 2005–016 of September 29, 2005 on the Activity and Supervision of Microfinance Institutions (2005) Malawi  X X X G Consumer Protection Law (2003) F The proposed Financial Services Act contains consumer protection provisions with explicit references to financial services. Malaysia  X X  G Consumer Protection Act (1999) O Bank Negara Malaysia has issued a number of market conduct guidelines in 2005. Mali X  X  E Law on the Definition and Repression of Usury (1997) O Notices to Banks and Financial Institutions on Banking Conditions (1992) Mauritania    X G Instr. n°04/GR/2008 (2008) E Name of law not provided. F Name of law not provided. Mauritius  X X X G Consumer Protection Act (1991); Competition Act (2007) Mexico X  X X E Law on Protection and Defense of Financial Services Users (1999) Moldova    X G Law on Consumer Protection No.105–XV of March 13, 2003 (2003) F Regulation on Publishing Information on Financial Activity by Licensed Banks of the Republic of Moldova (2000) Mongolia  X  X G Law of Mongolia on Consumer Protection (2003) F Banking Law (1996); Law on Deposits, Loans and Transactions (1995) Montserrat X X X X Morocco X X   E Bill No. 27–00 enacting consumer protection measures is currently before Parliament. F Banking Law (Chapter II, Section VI) (2006) O Law on Fair Pricing and Competition (2006) Mozambique  X  X G Consumer Protection Law (2009) F Law 15/99—Law of Credit Institutions and Financial Companies (1999), amended by By-Law 9/04 (2004); Notice No. 5/GBM/2009 (2009). Namibia  X X X G Name of law not provided. Nepal  X X X G Consumer Protection Act (1997) F I N A N C I A L A CC E S S 2 0 1 0 95 TABLE 13 (CONTINUED) Consumer protection legislation G E F O General consumer protection Consumer protection law with Consumer protection regula- Other types of consumer law without explicit reference explicit reference to financial tions within the framework of protection regulation to financial services services financial sector legislation Netherlands   X X G Dutch civil law (i.e., Dutch Civil Code); Act for the Enforcement of Consumer Protection (2007) E Financial Services Act (2006) New Zealand    X G Fair Trading Act (1986) E Securities Act (1978); Securities Markets Act (1988); Unit Trusts Act (1960); Superannuation Schemes Act (1989); Credit Contracts and Consumer Finance Act (2003) F Securities Regulations; Financial Service Providers (Registration and Dispute Resolution) Act (2008); Financial Advisers Act (2008). The Financial Service Providers Act and Financial Advis- ers Act provide for the registration of all financial service providers, consumer access to dispute resolution schemes, and authorization of financial advisers, conduct rules, and disclosure of information. Nicaragua   X  G Law No. 182, Law on Consumer Protection (1994) E Draft Law on the Protection of the Rights of Consumer Users (2006) O Regulation of Law No. 182 (1999) Niger X  X  E Law on the Definition and Repression of Usury (1997) O Notices to Banks and Financial Institutions on Banking Conditions (1992) Nigeria X  X X E Consumer Protection Act (1992) Norway    X G Marketing Control Act (2009); Personal Data Act (2001) E Financial Contracts Act (1999) F Loan Contract Regulation (2000) Oman  X X  G Consumer Protection Law (2002) O Banking Law of the Sultanate of Oman (1974). Under the Banking Law, the Central Bank is required to take up customer grievances addressed to it with the concerned licensed institutions for amicable resolution. Pakistan X    E Banking Companies Ordinance, Section 82A–G (1962) F State Bank of Pakistan Act (1956); Microfinance Institutions Ordinance (2001); State Bank of Pakistan regulations O BPD Circular No. 30 of 2005 Basic Banking Account (2005); BPRD Circular No. 13 of 2008 Fair Debt Collection Guidelines (2008); BPRD Circular No. 38 of 1997 Collection of Utility Bills (1997); Circular Letter No. 25 of 2009 (2009); BPRD Circular No. 11 of 2009 Pension Disbursement through Banks (2009); BPD Circular No. 23 of 2003 Service Charges on PLS Deposits (2003); BPD Circular No. 12 of 2006 Suo–Moto (2006); Case No. 4 /2006—Proper Arrangements in Commercial Banks for Depositing Utility Bills (2006); Service Charges PLS Deposits BPD of 2003 (2003); BSD Circular Letter No. 17 of 2000 (2000). The State Bank of Pakistan is also working on a draft Consumer Protection Law. Panama     G Law No. 45, establishing Norms on Consumer Protection and Fair Competition (2007) E Banking Law, Executive Decree No. 52 (2008), which adopts the text of Decree Law 9 (1998), as amended by Decree Law 2 (2008) F Agreement No. 2, Procedures for Dealing with Complaints to the Superintendant (2008) O Law No. 81, Protection of the Rights of Users of Credit Cards and Other Funding Cards (2009) Papua New X X X X Guinea Paraguay  X X  G Law No. 1-1334 on Consumer Protection (1998) O Information Transparency of Law No. 861/96, General Banking, Financial and Other Credit Institutions, Article 106 (1996). The law provides some measure of protection to customers of financial institutions. 96 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 13 (CONTINUED) Consumer protection legislation G E F O General consumer protection Consumer protection law with Consumer protection regula- Other types of consumer law without explicit reference explicit reference to financial tions within the framework of protection regulation to financial services services financial sector legislation Peru    X G Law of the System of Consumer Protection approved by Supreme Decree No. 006–2009–PCM (2009). Since 2000, there have been rules enacted on the issue of consumer protection. However, these have been updated over time. Currently, the existing rule is the consolidated text of the law named here. It is important to note that the competent authority in this area is the Institute of the Defense of Competition and Intellectual Property (INDECOPI). E Complementary Law No. 28587 on Financial Consumer Protection (2005). The aforementioned Supreme Decree No. 006–2009–PCM provides guidelines on the use of financial services or products, in addition to Complementary Law No. 28587. F Information Transparency Regulation and regulations applicable to engagement with users of the financial system, approved through Resolution No. 1765–2005 SBS (2005) O In 2009, work began with the aim of developing a Consumer Code with rules that would provide greater protection to consumers. Philippines     G Consumer Act of the Philippines (1992) E Republic Act No. 1405 – Law on Secrecy of Deposits (1955), amended by Presidential Decree No. 1792 (1981) and Republic Act No. 7653 – New Central Bank Act (1991); Republic Act No. 6426 – Foreign Currency Deposit Act of the Philippines (1974), amended by Presidential Decree No. 1035 (1976) and Presidential Decree No. 1246 (1977); Republic Act No. 3765 – Truth in Lending Act (1963); Republic Act No. 8484 – Access Devices Regulation Act (1998); Presidential Decree No. 957, Section 18 – The Subdivision & Condominium Buyers’ Protective Decree; Republic Act No. 7279 – Urban Development & Housing Act (1992); Republic Act No. 6977 – Magna Carta for Small & Medium Enterprises (1991), amended by Republic Act No. 8289 (1997); Republic Act No. 9178 – Barangay Micro Business Enterprises Act (2002); Republic Act No. 8435 – Agriculture & Fisheries Modernization Act (1997); Republic Act No. 8792 – E-Commerce Law (2000); Batas Pambansa Blg. 344 – Law for the Disabled (1982); Republic Act No. 9510 – Credit Information System (2008) F Revised Rules & Regulations implementing Republic Act No. 9160 – The Anti-Money Laundering Act (2001), amended by Republic Act No. 9194 (2003); General Banking Law (2000); BSP Manual of Regulations for Banks (MORB); BSP Manual of Regulations for Non-Banks & Financial Institutions (MORNBFI) O BSP Manual of Regulations on Disclosure; Circular Letter–2009–038 on Consumer Protection against Unfair Collection Practices (2009); Circular Letter–2009–029 on Consumer & Bank Protection & Complaints Handling Mechanism on Matters Related to Bank Security Programs & Use of Electronic Banking Facilities (2009); Circular Letter–2009–006 on Remittance Scam Involving the Use of Credit Cards (2009); Various advisories on BSP's Web site and in newspapers. Poland     G Act on Competition and Consumer Protection (2007); Act on Combating Unfair Commercial Practices (2007) E Act on the Protection of Certain Consumer Rights and on the Liability for Damage Caused by a Dangerous Product (2000) F Act on Consumer Credit (2001) O Act on Investment Funds (2004) Portugal  X   G Law No. 24/1996 – General Consumer Protection Law (1996) F Decree–Law No. 133/2009 of 2 June: Introduced a regime of maximum annual rates of charge that credit institutions must comply with in consumer contracts; Instruction No. 8/2009: A Standardized Information Sheet to be provided to customers in the precontractual stages of consumer credit; Instruction No. 11/2009: The standardization of the method for cal- culating the Annual Rate of Charge; Decree–Law No. 192/2009 of 17 September: The introduction of the concept of Adjusted Annual Rate of Charge, an interest rate that takes into account the cost of products and services subscribed in tandem with a housing mortgage credit in order to reduce the spread or the fee of this credit, and also extends the rules of Decree–Law No. 51/2007 to related housing mortgage credits, specifically the caps on penalties in case of early repayment; Decree–Law No. 103/2009 of 12 May: The creation of an extraordinary credit line, during two years, in order to provide protection of the proprietary home in case of unemployment; Decree–Law No. 222/2009 of 11 September: The inser- tion of measures of consumer protection concerning life insurance contracts associated to the housing mortgage credit; Notice No. 4/2009 and 5/2009: A Standardized Information Sheet to be provided to customers for all kinds of deposits (plain vanilla, dual and indexed); Notice No. 6/2009: A 100% capital guarantee for all deposits; the indexed deposits must be linked to relevant economic or financial variables; Notice No. 10/2008 of 22 December: New information and transparency duties with which credit institutions have to comply when advertising their products and services; Notice No. 8/2008 of 12 October: A list of fees and charges applied by credit institutions, when selling their products and services, must be easily accessible to customers in all branches; Decree–Law No. 317/2009 of 30 October: A new legal framework applicable to Payment Services, which transposes the European Directive No. 2007/64/EC; Decree–Law No. 430/91 of 2 November: Establishes the different types of deposits permitted by law; Decree–Law No. 349/98 of 11 November and Decree–Law No. 51/2007 of 7 March: Govern the commercial practices and information duties of credit institutions in the scope of housing mortgage credit; introduce the concept of annual rate of charge as well as a cap on the penalty fees charged in case of early repayment of housing loans; Decree–Law No. 171/2008 of 26 August: Prohibits the charging of any fee for renegotiating housing mortgage contracts and for making such renegotiations dependent on the subscription of additional financial products and services; Decree–Law No. 240/2006 of 22 December: Establishes the rules on interest–rate rounding in housing mortgage credit contracts. O Instruction No. 27/2003: Establishes a Standardized Information Sheet for housing mortgage credit, based on European Commission Recommendation No. 2001/193/EC; Notice No. 3/2008: Establishes rules on the information provided to customers regarding their net current account balance. Puerto Rico     G Law No. 4: Creates the Office of the Commissioner of Financial Institutions (1985) E Regulation No. 6194: Lease of Movable Property with the Option to Buy (2000) F Regulation No. 6451: On Collection Agencies (2002) O Regulation No. 7751: Against Deceptive Practices and Advertisements (2009) Romania X X X X Russian X  X  Federation E Law on Consumer Protection (1992) O Law on the Insurance of Individual Deposits in Russian Banks (2003) F I N A N C I A L A CC E S S 2 0 1 0 97 TABLE 13 (CONTINUED) Consumer protection legislation G E F O General consumer protection Consumer protection law with Consumer protection regula- Other types of consumer law without explicit reference explicit reference to financial tions within the framework of protection regulation to financial services services financial sector legislation Rwanda X X X X Senegal X  X  E Law on the Definition and Repression of Usury (1997) O Notices to Banks and Financial Institutions on Banking Conditions (1992) Serbia  X   G Law on Consumer Protection (2005) F RS Official Gazette No. 15/2009—Decision Specifying Conditions and Manner of Dealing With Bank Customer Complaints (2009); RS Official Gazette No. 4/2006—Decision on Minimum Conditions for the Conclusion of the Financial Lease Contract and the Manner of Disclosing the Leasing Fee and other Costs Arising from the Conclusion of such Contract and its supplement in RS Official Gazette No. 64/2006 (2006). According to the supplement on the Decision on Minimum Conditions for the lessee–natural person, the obligation to make an upfront payment (in an amount that cannot be lower then 20% of the gross purchase value of the lease object), was suspended until the end of 2009. O Decision on the General Terms of Business Applied by Banks in Relations with Natural Person Clients (2009) Sierra Leone    X G Banking Act (2000); Other Financial Services Act (2001); Payments System Act (2008) E Banking Act (2000); Other Financial Services Act (2001) F Banking Regulations Act (2005) O A review of the statutes focusing on consumer protection issues is currently in process. Singapore    X G Consumer Protection (Fair Trading) Act (2003) E The Consumer Protection (Fair Trading) (Regulated Financial Products and Services) Regulations (2009); Securities and Futures Act (2001); Financial Advisers Act (2001) F Securities and Futures Act (2001); Financial Advisers Act (2001). Both acts contain various provisions which address risks to consumers such as those arising from insufficient, false, or misleading disclosure, conflicts of interest, and misrepresentation. Slovak    X Republic G Act on Consumer Protection (1992) E Act No. 266/2005 Coll. on the Consumer Protection in Connection with the Distance Financial Services (2005) F Act No. 747/2004 Coll. on Supervision of the Financial Market (2004); Act No. 659/2007 Coll. on the Introduction of the Euro in the Slovak Republic (2007); Act No. 483/2001 Coll. on Banks (2001); Act No. 186/2009 Coll. on Financial Intermediation and Financial Counselling (2009); Act No. 492/2009 Coll. on Payment Services (2009); Act No. 8/2008 Coll. on Insurance (2008); Act No. 43/2004 Coll. on Retirement Pension Saving (2004); Act No. 566/2001 Coll. on Securities and Investment Services (2001); Act No. 594/2003 Coll. on Collective Investment (2003); Act No. 118/1996 Coll. on Deposit Protection (1996); Act No. 650/2004 Coll. on Supplementary Pension Saving (2004) South Africa   X X G Consumer Affairs Act (2001) E National Credit Act (2007) Spain  X   G Royal Legislative Decree 1/2007 of November 16, approving the revised text of the General Law for the Protection of Consumers and Users, and other complementary laws (2007) F Beyond the specific rules relating to securities and insurance, outside of the Bank of Spain, there is Royal Decree 303/2004, Approving the Regulation of the Commissioners for Financial Consumer Protection (2004); ECO Order 734/2004, On the Departments and Services of Customer Care and Protection of the Clients of Financial Institutions (2004); Order of 12.12.1989 on Interest Rates and Fees, Performance Standards, Customer Information and Advertising by Financial Institutions (1989); Order of 5.5.1994, Transparency of the Financial Conditions of Mortgage Loans (1994); Circular No. 8 /1990 of the Bank of Spain, Transparency of Operations and Protection of Customers (1990); Order PRE/1019/2003, Transparency of Prices of Banking Services Delivered through ATMs (2003). O Law 7/1995, On Consumer Credit (1995); Act 2, On Subrogation and Modification of Mortgage Loans (1994); Law 22/2007, On Provision of Financial Services Remotely (2007); Law 41/2007, amending Law 2 /1981, Regulation of the Mortgage Market and other Rules of the Mortgage and Financial System (regulation of reverse mortgages and care insurance, by establishing certain tax legislation) (2007); Law 2 /2009, Contractual Regulation of Loans or Mortgage Loans & Credit and Related Financial Intermediation Services (2009); Law 16/2009, On Payment Services (2009); Law 7/1998, On General Contractual Conditions (1998). There is different legislation for the protection of financial consumers in various operational provisions, both in law as Orders and in Circulars of the Bank of Spain. Sri Lanka    X G Consumer Protection Act (1979) E Banking Act (1988) F Banking Act (1988) St. Kitts and X X X X Nevis St. Lucia X X X X 98 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 13 (CONTINUED) Consumer protection legislation G E F O General consumer protection Consumer protection law with Consumer protection regula- Other types of consumer law without explicit reference explicit reference to financial tions within the framework of protection regulation to financial services services financial sector legislation St. Vincent and X X X X the Grenadines Sudan X X X X Swaziland     G Competition Commission Act (2008) E Name of law not provided. F Financial Institutions Act (2005) O Central Bank of Swaziland (CBS) Order (1974) Sweden     G Consumer Sales Protection Act (1990) E Consumer Credit Act (1992) F Financial Advice to Consumers Act (2003) O Finansinspektionen's (Swedish Financial Supervisory Authority) Regulations and General Guidelines regarding Financial Advice to Consumers (2004) Switzerland     G Several codes of Swiss civil law carry special rules favoring consumers. E The "Konsumkreditgesetz" (KKG) (2001) governs credit relations with consumers with the main aim to protect them against over indebtedness. F Several provisions of Swiss banking law and financial products law carry rules to protect unqualified investors, to mitigate information asymmentries, and to impose duties and rules of business conducts on financial services providers. O A lot of topics are governed by self–regulation issued by industry associations, such as the Swiss Banking Association. In part, violation of those self-regulation rules may lead to supervisory sanctions, as would the breach of state law. Syrian Arab X  X X Republic E Consumer Protection Law No. 2 (2008) Taiwan, China  X X X G The Consumer Protection Law (1994) Tajikistan  X  X G Law on Consumer Protection F Banking Act (1998) Tanzania  X X X G Fair Competition Act (2003) Thailand  X  X G Consumer Protection Act (1998) F Financial Institutions Act (2008) Togo X  X  E Law on the Definition and Repression of Usury (1997) O Notices to Banks and Financial Institutions on Banking Conditions (1992) Tunisia  X  X G Law N°92–117 on Consumer Protection (1992); Law N°91–64 on Competition and Pricing (1991); Law N°98–39 on Financing (1998); Law N°98–40 on Sales Techniques and Commercial Advertising (1998); Organic Law N°2004–63 on the Protection of Personal Data (2004) F Law N°2001–65 on Credit Institutions (2001); Law N°2006–26 amending and supplementing Law N°58–90 on the Establishment and Organization of the Central Bank of Tunisia (2006). The Center for Banking Services was created in 2006 under the Central Bank and is charged with monitoring the quality of services provided by credit institutions to their clients and the establishment of reference guides for banking services in order to inform the public and disseminate best practices in this sector. The promotion of the quality of banking services was established as a legal obligation in 2006. The supervision of bank–client relations was brought about by the enactment of the management agreement on deposit accounts, the definition of basic banking services, and the establishment of a mediation system to amicably resolve disputes between two parties. F I N A N C I A L A CC E S S 2 0 1 0 99 TABLE 13 (CONTINUED) Consumer protection legislation G E F O General consumer protection Consumer protection law with Consumer protection regula- Other types of consumer law without explicit reference explicit reference to financial tions within the framework of protection regulation to financial services services financial sector legislation Turkey X   X E Law No. 4077 on Consumer Protection (1995) F By–Law on Rules and Procedures for Early Repayment Discount for Consumer Credits and Calculation of Annual Cost Rate (2003); By–Law on Rules and Procedures for Pre–Contractual Information Sheet Given by Housing Finance Institutions (2007); By–Law on Rules and Procedures for Informing Consumers about Housing Finance Contracts Containing Variable Interest (2007); By–Law on Rules and Procedures for Early Repayment Discount and Calculation of Annual Cost Rate in the Housing Finance System (2007); By–Law on Rules and Procedures for Refinance of Loans under Housing Finance (2007) Uganda X X  X F Financial Institutions Act (2004); Microfinance Deposit–Taking Institutions Act (2003). The Financial Institutions Act and the Microfinance Deposit–Taking Institutions Act ensure the safety of depositors' funds. Ukraine    X G The Law of Ukraine on Consumer Rights Protection (1991) E The Law of Ukraine on Consumer Rights Protection (amended in 2001 to include financial service provisions) F Name of law not provided (2007). United Arab X X X X Emirates United     Kingdom G Cancellation of Contracts made in a Consumer’s Home or Place of Work Regulations (2008); Consumer Protection Act (1987); Consumer Protection (Distance Selling) Regulations (2000); Consumer Protection from Unfair Trading Regulations (2008); Estate Agents Act (1979); Fair Trading Act (1973); General Product Safety Regulations (2005); Package Travel, Package Holidays and Package Tours Regulations (1992); Prices Act (1974); Property Misdescriptions Act (1991); Protection from Harassment Act (1997); Sale and Supply of Goods to Consumers Regulations (2002); Sale of Goods Act (1979); Supply of Goods (Implied Terms) Act (1973); Supply of Goods and Services Act (1982); Timeshare Act (1992); Weights and Measures Act (1985); Weights and Measures (Packaged Goods) Regulations (2006) E Consumer Credit Act (1974); Unfair Contract Terms Act (1977); Unfair Terms in Consumer Contracts Regulations (1999); numerous other regulations, including provisions relating to interest rates. F There are numerous regulations but the main provisions are contained in the Financial Services and Markets Act (2000) and Consumer Credit Act (1974). O Financial Services and Markets Act (2010) grants power to the Financial Services Authority (FSA) to make rules to protect consumers. These are contained in the FSA's Handbook. There are many laws and regulations that relate to consumer protection in financial services in the UK. This legislative framework includes acts of the UK parliament and statutory instruments, some of which enact EU law into domestic law. In addition, the UK's common law system means that these acts and regulations are supplemented by judge–made laws. United States     G Federal Trade Commission Act (1914) E Consumer Credit Protection Act (1968) F There are numerous regulations issued by federal agencies that supervise depository institutions. O The US has numerous laws, both federal and state, that regulate a broad range of financial services for consumer protection. Uruguay     G Law on Consumer Relations (2000) E Usury Law (2007) F Circular 2.016 BCU, Relationship with Customers and Information Transparency (2009) O Regulatory Decree of the Law of Usury (2009) Uzbekistan X  X X E Law on Protection of Consumers' Rights (1996) Venezuela,  X   R.B. de G Law for the Protection of Persons in Access to Goods and Services (2010) F Resolution No. 147.02, Official Gazette of the Bolivian Republic of Venezuela No. 37.517, Rules for the Protection of Users of Financial Services (2002); Resolution No. 209.08, Official Gazette No. 39.002, Concerning Preferential Treatment and the Adequacy of Facilities for People with Disabilities, Seniors and Pregnant Women (2009); Resolution No. 385.07, Official Gazette No. 38.825, Stating that All Financial Institutions that Capture Public Resources Must Provide at Least One Checkbook per Checking Account at the Time of Account Opening (2007) O Resolution No. 228.07, Official Gazette No. 38.800, Prohibiting Financial Institutions from Using Compound Interest in the Calculation of Interest on Lending in the Form of Credit Cards (2007) 100 F I N A N C I A L A CC E S S 2 0 1 0 TABLE 13 (CONTINUED) Consumer protection legislation G E F O General consumer protection Consumer protection law with Consumer protection regula- Other types of consumer law without explicit reference explicit reference to financial tions within the framework of protection regulation to financial services services financial sector legislation Vietnam X X  X F Credit Institution Law (1997); Government's Decree on Deposit Insurance (1999) Yemen, Rep. X X X X of Zambia  X  X G Competition and Fair Trading Act (1994) F Statutory Instruments No. 179 (Cost of Borrowings) and No. 183 (Disclosure of Deposit Charges and Interest) of the Banking and Financial Services Act (1995) Zimbabwe    X G Hire Consumer Contact Act (1994) E Moneylending and Rates of Interest Act (1930); The Banking Act (1999) F Moneylending and Rates of Interest Act (1930); The Banking Act (1999)