and growth, insofar as it is access to financial services which convert aggregate savings to aggregate investment. Savings kept at home (under the mattress or in a tin can) cannot contribute to economic growth. By the same token, unbanked entrepreneurs who cannot obtain credit also represent an opportunity cost to a national economy. Hernando de Soto has argued that access to capital and to financial services is the key to economic growth both in advanced economies and in the developing world (de Soto, 2000.) Access to financial services can help promote equity, and can, in this context, be linked to better economic equilibrium and to faster economic growth (Stegman, 1999.) Recent research has centered on the impact of access to credit on micro-economic development, suggesting that improving the access of micro-enterprises to financial services could have an important positive impact on a country’s income distribution (Westley, 2001.) Other literature links better income distribution to macro-economic growth. Surveys of the literature on financial intermediation and poverty reduction conclude that development of the financial sector contributes to economic growth and thereby to poverty alleviation (Holden and Prokopenko, 2001.) Finally on-going research at the World Bank looking at cross-cutting evidence substantiates the hypothesis that “countries with better-developed financial intermediaries experience faster declines in measures of both poverty and income inequality.” (Beck,Demirguc-Kunt, and Levine, 2004.) A number of recent studies have looked at the positive results stemming from access to a broad range of financial services and payment system services (Christen, 2000; Wenner and Campos, 1998). Reports from the development banking community and studies of international NGOs (Dichter, 1997), strongly suggest that lower income families need a wide range of complementary financial services both for everyday life and for asset building purposes (Caskey, 2001; Robinson, 2001; Rutherford, 1999).

In the USA, the responsibility of government to “bring its broad-based experience in capital markets and financial services to bear on the inner city” was underlined in 1997 by the then Secretary of the Treasury, Robert Rubin. Referring to an initiative that gave Treasury the responsibility of bringing unbanked welfare recipients into the mainstream banking system, Rubin declared. “If this works... it will not only give them a more efficient way to cash checks and access to other financial services, but it may also encourage people to save, to plan financially and, therefore, to improve their economic life over time.” A further argument to link broader coverage of financial services to economic growth comes from the private sector. Experience from high-income countries demonstrates that niche “community development” financial institutions catering to low-income clients can be good businesses. Recent studies by the US Federal Reserve and the Office of Controller of the Currency have favorably compared the profitability of investments under the Community Reinvestment Act credits to commercial investments, and the profitability of community development financing institutions to other start-up banks. Indeed the fact that the banking crisis experienced in the US in the 1980’s – the results of deregulated banks’ over-investing in high risk venture -- did not in fact cause a major sector collapse – as occurred in Mexico and in Colombia under similar circumstances, has been attributed to the fact that the US banks had spread their business over a wider gamut and depend on a variety of population sectors, not just the wealthy. Anecdotal evidence from banks such as _Banco Popular_ of Puerto Rico, Union Bank of California, Pa4