69
1
I
H
G
F
E
D
C
B
A
12
11
10
9
8
7
6
5
4
3
2
4.1
Overview
4.1.1
Motivation for Assessing Financial Structure and Financial
Development
Extensive evidence confirms that creating the conditions for a deep and efficient financial
system can contribute robustly to sustained economic growth and lower poverty (e.g., see
Beck, Levine, and Loayza 2000, Honohan 2004a, and World Bank 2001a). Moreover, in
all
levels of development, continued efficient and effective provision of financial services
requires that financial policies and financial system structures
be adjusted as needed in
response to financial innovations and shifts in the broader macroeconomic and institu-
tional environment.
4.1.2
Scope of Analysis
The goals of financial structure analysis and development assessment for a country are to
(a) assess the current provision
of financial services, (b) analyze the factors behind miss-
ing or underdeveloped
services and markets, and (c) identify the obstacles to the efficient
and effective provision of a broad range of financial services.
The dimensions along which
service provision must be assessed include the range, scale (depth) and reach (breadth or
penetration), and the cost and quality of financial services provided to the economy. At a
high
level of abstraction, those services are usually classified as including the following:
• Making payments
• Mobilizing
savings
Chapter 4
Assessing Financial Structure and
