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CGD Policy Blogs


Financial Access Studies Clash over Whether Glass is Half Full or Half Empty

The biggest controversy to hit microfinance since the Compartamos IPO erupted this week as easygoing, bookish economist types at two East Coast microfinance research institutions dueled over the longstanding empirical question of whether the glass is half full or half empty. CGAP researchers, citing industry-consensus best-practice guidelines, accentuated the positive in observing that about 2.5 billion adults worldwide have accounts with formal banking institutions (about 2.5 billion do not). Academic researchers at the NYU-based Financial Access Initiative adopted a more skeptical stance, pointing out that Half the World is Unbanked.

OK, so I won't quit my day job for nightclub comedy.

Two new studies are indeed out tallying how many people have credit or savings accounts with commercial banks, savings banks, post office savings banks, cooperatives, government development banks, and microfinance institutions. The FAI report is short and sweet and draws on data from Patrick Honahan, who is now governor of Ireland's central bank. In contrast, the CGAP report harvests new information collected by surveying financial regulators in 139 countries.