The purpose of this paper is to examine the moderating role of financial consumer protection (FCP) in the access–development nexus.
The study is based on cross-country data on 102 countries surveyed in the World Bank Global Survey on FCP and Financial Literacy (2013). The White heteroscedasticity adjusted regressions and Two-stage least squares regressions (2SLS) are used for the estimation.
Interactions between FCP regulations that foster fair treatment, disclosure, dispute resolution and recourse and financial access have positive net effects on economic development. However, there is no sufficient evidence to suggest that interactions between financial access and enforcement and compliance monitoring regulations have a significant effect on economic development.
First, policy makers should continue with efforts aimed at instituting FCP regimes as part of strategies aimed at broadening access to financial services for enhanced economic development. Second, instituting FCP regimes per se may not be enough. Policy makers need to consider possible intervening factors such as the provision of adequate resources and supervisory authority, for compliance monitoring and enforcement to achieve the expected positive effect on economic development.
This study extends evidence in the law–finance–growth literature by providing empirical evidence on the effect of legal institution specific to the protection of retail financial consumers on the access–development nexus using a nouvel data set, the World Bank Global survey on FCP and Financial Literacy (2013).
Kriese, M., Abor, J.Y. and Agbloyor, E. (2019), "Financial access and economic development: the moderating role of financial consumer protection", International Journal of Managerial Finance, Vol. 15 No. 4, pp. 406-424. https://doi.org/10.1108/IJMF-05-2018-0132Download as .RIS
Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited