A Systematic Conceptual Review of Financial Access

Background and Purpose: The importance of financial access, or an individuals’ access to financial products and services from mainstream financial institutions, is demonstrated by its fundamental significance to promoting individual financial functioning, financial capability, and financial well-being. However, consensus about financial access conceptualization and definition is lacking. The concept of financial access can be narrowly defined as simply using basic financial products and services, or be broadened to describe owning, learning about, and using products and services. More expansively, it can relate to one’s opportunity, ability, and choice to open and use beneficial financial products and services over time, which can include reasonable costs, consumer protections, convenience, having the legal right and necessary documentation and eligibility. The lack of agreement about the concept also affects measurement in research studies. Researchers often focus on only ownership of financial products and services, and often solely on bank account ownership. Some scholars use ownership and use of credit cards, mortgage and small business loans, small-dollar consumer loans, emergency savings, insurance (including health), and/or investment vehicles in measurement. Furthermore, subjective measures (e.g., comfort with mainstream financial institutions) have also been used. This study aims to develop a new definition and measurement of financial access built on a systematic conceptual review to synthesize its definitions and measurements in the related literature.

Method: The systematic conceptual review is based on 171 articles published during January 2012-August 2022 retrieved from Scopus and Dissertation and Thesis Global databases. Additionally, within SCOPUS, we retrieved articles that shared references with 12 selected articles, as well as searched for articles from 20 key authors. Using grounded theory, data were coded related to financial access concepts, definitions, measurement, and associated content.

Results: A conceptual framework, definition, and four measurement domains and proposed items of financial access were created. Based on authors’ subject expertise, a fifth domain and associated items was added. Financial access was defined as “An individual has financial access (i.e., encounters no intrinsic or external barriers) who has freely chosen to utilize available, affordable, appropriate, and secure household financial-related products, services, practices, and policies provided by formal financial institutions and governments that contributes to their financial and economic well-being.” The five domains of financial access are (1) mainstream financial products and services, (2) financial products and services utilized by public cash transfer programs, (3) institutional practices of financial service providers, (4) individual financial-related qualities and abilities, and (5) individual financial action.

Conclusions and Implications: Financial access is a multi-dimensional concept. Researchers can use the domains and items in their measurement of financial access to more fully account for the financial environment, reduce measurement error, and compare findings across studies. Practitioners and policymakers working to promote financial access can promote the multi-dimensional nature of financial access in their work, to include intrinsic (e.g., comfort with a product) and external (i.e., bank discrimination) components.