By Catalina Granda-Carvajal, Franz Hamann and Cesar Tamayo
In this paper we build an incomplete-markets model with heterogeneous households and firms to study the aggregate effects of saving constraints and credit constraints in general equilibrium. We calibrate the model using survey data from Colombia, a developing country in which informal saving and credit frictions are pervasive. Our quantitative results suggest that reducing savings costs increases selection into formal saving, but the effect on aggregate outcomes and welfare is dwarfed by that of a policy which ameliorates borrowing constraints. Such a policy improves resource allocation and increases returns to capital and labor, resulting in higher savings and welfare gains for both households and firms.
In other words, it is very nice to get unbanked people into formal banks, but the real impact is by getting access to formal credit. At least for the aspects considered by the paper. Being unbanked has other consequences, such as the risk of losing savings kept in cash in your home and more difficult payments, in particular online. That is unlikely (my guess) to be more important that what this paper highlights, though.