Countries with higher expected GDP levels are more likely to experience an increase in the number of loans per 1,000 adults (Table 11). This also means that countries where macroeconomic expectations are negative are more likely to experience decreases in loan numbers as demand shrinks and banks tighten supply as credit quality deteriorates. Increase in loan penetration is larger for countries with a smaller number of outstanding loans to start with, indicating that even after controlling for expected GDP—a proxy for macroeconomic stability— access to credit continues to expand. The implications of these results are twofold. First, similar to deposit services, there is evidence that access to financial services is improving, albeit slowly. Second, macroeconomic stability is fundamental for access to credit services.

# **_3.2.1  Banks vs. non-banks in access to credit services_**

Comparison of the data provided by regulators on loans granted by banks and nonbanks is difficult for the same reasons highlighted earlier with regard to deposit services. The subset of countries with comparable data on the number of loans includes only 19 countries. The numbers are even smaller for specialized state financial institutions and microfinance institutions: 15 and 7 countries, respectively. In all cases, the average percentage change in the number of loans is not statistically significantly different from zero, similar to commercial banks.

The decline in loan volume is essentially even across different financial institutions. Nevertheless, NBFIs have experienced an increase, on average, in the number of loans per 1,000 adults, the median increase being 9 percent. It is important to note, however, that a number of countries in the sample which did not report any data on some or all types of NBFIs in 2009 did so in 2010, leading to a possible overestimation of the changes in loan volume.

Among the regulated financial institutions, banks hold 87 percent of loans-to-GDP ratio and 81 percent of number of outstanding loans per 1,000 adults. Among NBFIs, cooperatives and credit unions are the major source of credit by volume as well as by number, though the structure of the NBFI sector varies greatly from country to country. For example, in Spain and France, cooperatives account for at least half the credit volume while in South Korea, specialized state financial institutions account for nearly 67 percent of the volume.

Loans to firms represent 43.5 percent of the credit portfolio by value, but only 17.4 percent in terms of number. Banks are the main providers of credit to firms, while NBFIs are more often geared towards serving individuals in terms of volume. Nevertheless, the number of outstanding loans to individuals by banks constitutes the bulk of bank loans by number, if not by volume.

# **3.3 Outreach**

Global retail networks, consisting of financial institution branches, ATMs, and POS terminals, expanded in 2009. The world on average added about one bank branch, five ATMs, and 167 POS terminals per 100,000 adults. However, this growth was not universal. The number of bank branches decreased in 43 percent of countries, about half of which are high-income and Eastern 11