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Financial sector strategies enable financial policy makers and stakeholders to take a holistic view of the financial development needs in their country and formulate balanced financial policies. They help policy makers consider the systemic risk that different development policies involve and choose an informed way forward. This study constructed a new data set of historical financial sector strategies covering 150 countries over 1985-2014. It assesses the strategies using the rating criteria proposed by Maimbo and Melecky (2014). It further investigates how the quality of the strategies can affect financial sector outcomes, such as financial depth, inclusion, efficiency, and stability. The investigation finds that the use of financial sector strategies helped increase financial sector deepening, inclusion, and stability, and this impact could be greater for higher-quality strategies. However, a significant relationship between the use of strategies and the efficiency of banks is not confirmed. One way how financial sector strategies can improve financial sector outcomes is by improving the regulatory framework for finance.

Efficiency And Inclusion --- Financial Depth --- Financial Sector Strategies --- Industry --- Policy Coordination --- Policy Tradeoffs --- Science and Technology Development --- Stability --- Technology Industry --- Technology Innovation

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Using two new datasets, the authors examine whether the presence of banks affects the profitability and outreach of microfinance institutions. They find evidence that competition matters. Greater bank penetration in the overall economy is associated with microbanks pushing toward poorer markets, as reflected in smaller average loans sizes and greater outreach to women. The evidence is particularly strong for microbanks relying on commercial funding and using traditional bilateral lending contracts (rather than the group lending methods favored by microfinance nongovernmental organizations). The analysis considers plausible alternative explanations for the correlations, including relationships that run through the nature of the regulatory environment and the structure of the banking environment; but it fails to find strong support for these alternative hypotheses.

Access to Finance --- Bank branch --- Banking system --- Banks --- Banks and Banking Reform --- Collateral --- Commercial banks --- Debt Markets --- Deposit --- Economic Theory and Research --- Finance and Financial Sector Development --- Financial Access --- Financial depth --- Financial institutions --- Financial services --- Group lending --- International Bank --- Loan --- Loan sizes --- Low-income borrowers --- Microfinance --- Microfinance institutions --- Outreach --- Profitability --- Repayment

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Using two new datasets, the authors examine whether the presence of banks affects the profitability and outreach of microfinance institutions. They find evidence that competition matters. Greater bank penetration in the overall economy is associated with microbanks pushing toward poorer markets, as reflected in smaller average loans sizes and greater outreach to women. The evidence is particularly strong for microbanks relying on commercial funding and using traditional bilateral lending contracts (rather than the group lending methods favored by microfinance nongovernmental organizations). The analysis considers plausible alternative explanations for the correlations, including relationships that run through the nature of the regulatory environment and the structure of the banking environment; but it fails to find strong support for these alternative hypotheses.

Access to Finance --- Bank branch --- Banking system --- Banks --- Banks and Banking Reform --- Collateral --- Commercial banks --- Debt Markets --- Deposit --- Economic Theory and Research --- Finance and Financial Sector Development --- Financial Access --- Financial depth --- Financial institutions --- Financial services --- Group lending --- International Bank --- Loan --- Loan sizes --- Low-income borrowers --- Microfinance --- Microfinance institutions --- Outreach --- Profitability --- Repayment

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The authors examine empirically how domestic structural characteristics related to openness and product- and factor-market flexibility influence the impact that terms-of-trade shocks can have on aggregate output. For this purpose, they apply an econometric methodology based on semi-structural vector auto-regressions to a panel of 90 countries with annual observations for the period 1974-2000. Using this methodology, the authors isolate and standardize the shocks, estimate their impact on GDP, and examine how this impact depends on the domestic conditions outlined above. They find that larger trade openness magnifies the output impact of external shocks, particularly the negative ones, while improvements in labor market flexibility and financial openness reduce their impact. Domestic financial depth has a more nuanced role in stabilizing the economy. It helps reduce the impact of external shocks particularly in environments of high exposure-that is, when trade and financial openness are high, firm entry is unrestricted, and labor markets are rigid.

Aggregate Output --- Business Cycle --- Currencies and Exchange Rates --- Debt Markets --- Developing Countries --- Economic Conditions and Volatility --- Economic Fluctuations --- Economic Growth --- Economic Theory and Research --- Emerging Markets --- Exchange Rate --- External Shocks --- Finance and Financial Sector Development --- Financial Depth --- Foreign Exchange --- Free Trade --- Growth --- Inequality --- International Economics & Trade --- Labor Market --- Labor Markets --- Macroeconomic Management --- Macroeconomic Policy --- Macroeconomic Stability --- Macroeconomics and Economic Growth --- Output Volatility --- Policy Research --- Poverty Reduction --- Private Sector Development --- Pro-Poor Growth --- Relative Importance --- Significant Impact --- Social Protections and Labor --- Structural Characteristics --- Trade Openness --- Trade Shocks

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Growing research and policy interest focuses on the misallocation of output and factors of production in developing economies. This paper considers the possible misallocation of financial loans. Using plant-level data on the organized and unorganized sectors, the paper describes the temporal, geographic, and industry distributions of financial loans. The focus of the analysis is the hypothesis that land misallocation might be an important determinant of financial misallocation (for example, because of the role of land as collateral against loans). Using district-industry variations, the analysis finds evidence to support this hypothesis, although it does not find a total reduction in the intensity of financial loans or those being given to new entrants. The analysis also considers differences by gender of business owners and workers in firms. Although potential early gaps for businesses with substantial female employment have disappeared in the organized sector, a sizeable and persistent gap remains in the unorganized sector.

Access to banking --- Access to credit --- Access to external finance --- Access to finance --- Access to financial services --- Access to formal credit --- Access to formal finance --- Access to loans --- Asymmetric information --- Bank branches --- Bank credit --- Bank financing --- Bank loan --- Bank loans --- Banking --- Banking services --- Banks --- Banks and banking reform --- Biases --- Borrower --- Borrowers --- Borrowing --- Business owners --- Business plans --- Capital --- Co-operative banks --- Collateral --- Collateral requirements --- Collateral support --- Commercial banks --- Cost of capital --- Credit --- Credit bureaus --- Credit information --- Credit market --- Credit markets --- Credit policy --- Credit registries --- Credit risk --- Credit support --- Credit-worthiness --- Creditworthiness --- Debt collectors --- Debt markets --- Directed credit --- Disparities in access --- Econometrics --- Economic activity --- Economic growth --- Economic policy --- Economics --- Employment --- Enterprise --- Enterprise development --- Entrepreneur --- Entrepreneurs --- Entrepreneurship --- Equity --- Exclusion --- External finance --- External financing --- Finance and financial sector development --- Financial access --- Financial deepening --- Financial depth --- Financial development --- Financial institutions --- Financial integration --- Financial markets --- Financial sector --- Financial sector development --- Financial services --- Financial strength --- Financing --- Fixed assets --- Formal credit --- Formal finance --- Gender --- Gender inequality --- Government policy --- Governments --- Guarantee --- Households --- Housing --- Human capital --- Inequality --- Information sharing --- Infrastructure --- Intangible assets --- Interest expense --- Interest payment --- Interest rate --- Investment --- Issue of access --- Job creation --- Labor --- Labor market --- Labor markets --- Lack of collateral --- Land markets --- Lenders --- Lending --- Liberalization --- Loan --- Loan access --- Loan demand --- Loans --- Macroeconomics --- Marginal revenue --- Market value --- Markets --- Micro enterprises --- Micro-credit --- Micro-enterprises --- Micro-entrepreneurs --- Micro-finance --- Micro-finance institutions --- Microfinance --- Monetary policy --- Money lenders --- Net value --- Outreach --- Outstanding loan --- Outstanding loans --- Overdraft --- Personal assets --- Private enterprise --- Private enterprises --- Profitability --- Property --- Real estate --- Repossession --- Reserve bank of india --- Resource allocation --- Revenue --- Risk --- Risk perception --- Rural bank --- Rural bank branches --- Services --- Sizes of loan --- Small business --- Small business owners --- Small businesses --- Strategies --- Tangible assets --- Taxes --- Trade credit --- Trade credits --- Transport --- Union --- Urban areas --- Value --- Villages --- Water & industry --- Water resources --- Water supply --- Working capital