Access to finance is the ability of individuals or enterprises to obtain financial services. This includes credit, deposit, payment, insurance, and other risk management services. Those who involuntarily have no or only limited access to financial services are referred to as the unbanked or underbanked, respectively.
Accumulated evidence has shown that financial access promotes growth for enterprises. Providing credit to both new and existing businesses helps them to grow. It benefits the economy in general by accelerating economic growth, intensifying competition, as well as boosting demand for labor. The incomes of those in the lower end of the income ladder will typically rise. Hence, reducing income inequality and poverty.
Furthermore, the lack of financial access limits the range of services and credits for household and enterprises. Poor individuals and small enterprises need to rely on their personal wealth or internal resources for their businesses. This limits their full potential and leading to the cycle of persistent inequality and diminished growth.
Also, access to finance varies greatly between countries. For instance, it ranges from about 5 percent of the adult population in Papua New Guinea and Tanzania to 100 percent in the Netherlands