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Financial Sector

Mind the gap: How bringing together cities and private investors can close the funding gap for urban resilience

Marc Forni's picture

Image: World Bank

By 2050, two-thirds of all people will live in cities. Each year, 72.8 million more people live in urban areas. That’s the equivalent of a new San Diego appearing every week.
 
But fast growth, and a high concentration of people and assets, makes cities vulnerable to climate change and disasters. By 2030, climate change alone could force up to 77 million urban residents into poverty.

As we celebrate Earth Day 2018 and continue the fight against climate change, cities are striving to become more sustainable, investing in ways to reduce their vulnerability to disasters and climate change. Achieving resilience is the goal – and the good news is that cities aren’t alone on the team.

New Global Findex data shows big opportunities for digital payments

Asli Demirgüç-Kunt's picture

We're delighted to release the 2017 Global Findex, the third round of the world's most detailed dataset of how adults save, borrow, make payments, and manage risk.

Drawing on surveys with more than 150,000 adults in more than 140 economies worldwide, the latest Global Findex features new data on fintech transactions made through mobile phones and the internet. It also provides time series updates for benchmark financial inclusion indicators.

The data shows that financial inclusion is on the rise globally, with 1.2 billion adults opening accounts since 2011, including 515 million in the last three years alone. That means 69 percent of adults globally have an account, up from 62 percent in 2014 and 51 percent in 2011. We see that Fintech, or financial technology, plays a progressively greater role in countries like China, where 50% of account owners use a mobile phone to make a transaction from their account. Compared to 2014, twice as many adults in Brazil and Kenya are paying utility bills digitally.

Brick and mortar operations of international banks

Claudia Ruiz's picture

The existing evidence from both cross-country and country case studies on the determinants of foreign bank entry and on the impact of foreign banks on host economies suggests the brick-and-mortar operations of international banks have important implications for competition and efficiency of the local financial sectors and for financial stability and access to credit in the host country (World Bank, 2018). The Global Financial Development Report 2017/2018: Bankers without Borders contributes to the policy dialogue on international banks by summarizing what has been learned so far about: i) the risks and opportunities posed by foreign banks when entering developing countries and ii) under what circumstances host economies can reap most benefits from the entry of international banks.

Even duller disasters? How earlier finance can save lives in emergencies

Nicola Ranger's picture
© International Bank for Reconstruction and Development/The World Bank 2016
© World Bank


Putting in place the funding, systems, and plans before a disaster strikes can help dull the impact of disasters by enabling earlier, faster and more effective response and recovery.

But can we go further, making disasters even ‘duller’ by also releasing finance before a disaster strikes? 

UN Under Secretary General for Humanitarian Affairs, Mark Lowcock, recently set out a compelling vision for how the humanitarian system can be improved. He argued that “disasters are predictable… we need to move from today’s approach where we watch disaster and tragedy build, gradually decide to respond, and then mobilise money and organisations to help, to an anticipatory approach, where we plan in advance for the next crises, putting the response plans and money for them before they arrive, and releasing the money and mobilising the response agencies as soon as they are needed…”

India’s remarkably robust and resilient growth story

Poonam Gupta's picture

India has achieved much in the last decades. Yet an economic deceleration in the past few quarters has generated worried commentaries about India’s growth potential.  However, our analysis of nearly five decades of data finds that India’s long-term growth process is steady, stable, diversified and resilient. Does this lay the groundwork for a more sustained 8% growth in the future? Yes, possibly, but more is needed. Let us elaborate.

First, India’s long-term economic growth has steadily accelerated over a fifty-year period, without any prolonged reversals. Thus, while growth averaged 4.4 percent a year during the 1970s and 1980s, it accelerated to 5.5 percent during the 1990s-early 2000s, and further to 7.1 percent in the past one decade. The acceleration of growth is evident not just for aggregate GDP, but even more strongly for per capita GDP. The average pace of per capita growth was 5.5 percent a year in the last decade. Interestingly, when compared with some of the world’s largest emerging economies, this steady acceleration of growth stands out as being unique to India.

Second, India’s rate of growth has become more stable. This is partly due to the stabilization of growth within each sector – agriculture, industry and services – and partly to the transition of the economy toward the services sector, where growth is more stable. Particularly interesting is the sharp increase in the stability of GDP growth since 1991. Before this, growth accelerated episodically, was punctuated by large annual variations, and often failed to sustain. Thus, growth has not just accelerated post liberalisation, it has also become more stable.

Third, growth has been broadly diversified. Growth has accelerated the fastest in services, followed by industry, and less so in agriculture. Over the long run, India’s growth has been driven by an increasing share of investment and exports, with a large contribution from consumption. Growth has also been characterized by productivity gains – both in labor productivity as well as in total factor productivity.

Finally, growth has been broadly resilient to shocks, both domestic and external. The resilience of India’s growth can be attributed to the country’s large and spatially diversified economy, as well as to its diversified production structure that is not dependent on a few products, commodities, or natural resources. It can also be attributed to India’s diversified trade basket and broad range of trading partners, wherein a slowdown in any one part of the world will not result in a large impact on India.



The resilience of India’s growth process was on display in recent years when the country recovered quickly from the impacts of two major policy events – demonetization and the implementation of the Goods and Services Tax (GST), an important indirect tax reform. We argue that the deceleration to growth rates below 7 percent between Q3 2016–17 and Q2 2017–18 was an aberration, attributed to temporary disruptions in economic activity as the economy adjusted to demonetization and businesses prepared for the implementation of GST. At present, there are indications that the economy has bottomed out and, in the coming quarters, economic activity should revert to the trend growth rate of about 7.5 percent. We project GDP growth to be 6.7 percent in 2017-18 and accelerate to 7.3 percent and 7.5 percent respectively in 2018-19 and 2019-20.

Fiscal Transparency in the Arab World: Where is the money going?

Renaud Seligmann's picture


Continuing the dialogue and peer-to-peer exchange on the benefits and challenges to fiscal transparency is essential to sustaining the momentum for reform. The time for action is now — the Arab world has a chance to go from lagging to leading on fiscal transparency.

Interest rate caps: The theory and the practice

Aurora Ferrari's picture

Ceilings on lending rates remain a widely-used instrument in many EMDEs as well as developed economies. The economic and political rationale for putting ceilings on lending rates is to protect consumers from usury or to make credit cheaper and more accessible. Our recent working paper shows that at least 76 countries around the world, representing more than 80% of global GDP and global financial assets, impose some restrictions on lending rates. These countries are not clustered in specific regions or income groups, but spread across all geographic and income dimensions.

Amp up your 2018 Spring Meetings experience

Bassam Sebti's picture


Our 2018 Spring Meetings is just around the corner and it’s time to get organized. Mainstage speakers include representatives from top-notch institutions such as LinkedIn, Oxford University, Financial Times, Brookings Institution — in addition to influencers Bill Gates and Jeff Weiner.

Connect, engage and watch to take full advantage of everything the #WBGMeetings has to offer. 

Enabling digital financial inclusion for rural women: emerging findings from India

Shobha Shetty's picture
"Pehle to bank jaane se bhi dar lagta tha, aur ab hum bank wali didi ban gaye hain’’ (Earlier I used to be afraid of stepping into a bank branch but now I am called a bank representative!). These are the words of Nidhi Kumari, aged 24 who hails from a Baheri Village in Darbhanga district of Bihar. You cannot help but notice the pride and new-found self-confidence behind her wide smile.

Nidhi is one of over 1500 Banking Correspondent Agents (BCAs) under the World Bank’s (IDA $500M) National Rural Livelihood Project (NRLP) in India that supports the Government’s National Rural Livelihood Mission (NRLM) in 13 high poverty states.
 
 Jeevika.
Nidhi Kumari at her BC Kiosk serving customers in her village. Photo courtesy: Jeevika.

Agent-based branchless banking in India is not new and has been around for over a decade. Given that there are over 650,000 villages in India and that less than 10 percent of villages have bank branches[i], an ICT-enabled alternate channel is now a dire necessity to enable greater financial inclusion. This agenda got a further boost when the Government of India launched the  Pradhan Mantri Jan Dhan Yojana (PMJDY) in 2014 to boost financial inclusion. To date, over 310 million PMJDY bank accounts (basic savings bank accounts) have been opened with 53 percent of these accounts now being held by women.

Economic and Social Empowerment is Believing in People’s Potential When No One Else Would!

Laila Tawfik Anaam's picture

Leaving university with a business degree back in 2010, my dream was to wow the business world with my enthusiasm and be the number one businesswoman in Yemen. Little did I know, within a year of working in the business sector, that my passion is not to make rich people richer nor to gain the title "number one businesswoman". My REAL passion in life is to be an influencer and a person who makes real positive impact in people's lives. Realizing that, I started to become a dedicated and aggressively motivated person who fights for economic and social empowerment in Yemen. Right there, I shifted my career focus and objectives from making an empire of my own to making it possible for people with potential, but fewer opportunities in life, to build their idea of an empire. 

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