to the item as a barrier to access, some by use of independent information. For example, in the case of affordability, the authors obtain data on the all-in cost (cash plus travel time<sup>18</sup> ) of each service and define as excluded those with monthly income less than 50 times that service (in Swaziland 88% of households are seen as excluded on cost grounds from transactions accounts). The idea of this single index seems to be to benchmark a country’s overall performance; the components of the index could point to the direction of policy solutions. While the implementation of the idea might be criticized, it does represent a creditable attempt to distill the information from household surveys in a policy-relevant manner.

A different type of household survey, the financial diary approach, attempts to document in detail the financial transactions of the poor. Pioneered in Bangladesh by Rutherford (2000), (2002), financial diaries can be thought of as an anthropological study exploring the way in which households manage their financial affairs. As such, it is more exploratory of patterns than simple quantification of pre-defined concepts. This approach has helped dispel misconceptions about how the poor employ substitutes for services that only the better-off can afford to acquire from mainstream finance. Awareness of these substitutes is a useful pre-requisite for formal institutions designing new products at reasonable cost to meet the demand of low-income clients with a viable cost structure.

# **3. Business surveys**

Three main methods for obtaining information about business use of financial services are used in advanced economies. The first is from the required public reporting by widely held and listed companies. This data is readily available and has been studied by many researchers. Information about the financial service use of smaller firms is not as readily available, though there are a number of important sources. Amadeus, a commercial service from Bureau van Dijk, draws on sources – mainly credit registries – in 34 European countries to provide a standardized balance sheet and income statement, 7-digit production sector, employment and ownership information for 5 million firms, most of them micro by standard EU definitions.<sup>19</sup> In principle, this kind of material could be assembled for other countries too, but I am not aware of any cross-country effort to do this. There are also some surveys carried out by official statistical or regulatory agencies, such as the five-yearly Survey of Small Business Finances by the US Federal Reserve Board, of which the most recent, in 2003, collected financial information on some 600 firms with fewer than 500 employees (cf. Board of Governors, 2002).

Turning to the developing world, there have been a couple of major initiatives in the area of business surveys. The World Business Environment Survey (WBES) is a 81-country cross-sectional firm level survey conducted in developed and developing countries in 1999-2000 following an initiative of the World Bank.<sup>20</sup> Typically about 100 firms were

> 18 The researchers used the same mean travel time for all households, but this also would in general vary by household.

> 19 Currently EU defines a firm as micro if it has fewer than 10 employees and either a turnover of less than €2 million or a balance sheet total of less than €2 million.  The thresholds for small and medium firms are (50, €10m. and €10m.) and (250, €50m. and €43m.) respectively.

> 20 The WBES builds on a number of earlier exercises (including some carried out by the IFC), though its sheer scale now tends to push these others into the background. One significant study of this type was the

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