In emerging markets, limited access to credit is not confined to the very poor, says IMF economic counselor Raghuran Rajan in the March issue of Finance and Development. In many poor countries, he writes, the middle class also has limited access to finance. The same mechanisms that will expand their access will often achieve that for the very poor as well.
The author goes on to outline the steps needed to establish financial services and infrastructure which would provide credit access to all in emerging markets. He also notes the importance of the government's role in fostering competition within a sound regulatory framework. "Given the right environment, the private sector has the ability, the incentives, and the resources to develop innovative services for the poor. A number of banks around the world, including Citibank, ICICI Bank, and ING, have started doing precisely this," he writes.