illustration for the drivers of inequality

Driver Category 4.11

Lack of regulation of financial sector; unequal access to banking services, affordable credit and housing loans

This driver covers the regulation of the financial sector and financial markets, including the regulation of banks and other financial institutions, and the regulation and supervision of financial markets.

It also captures financial aspects affecting financial exclusion, access to affordable credit, housing loans, drivers of overindebtedness such as unregulated short-term high cost loans (pay-day loans, 'loan sharks').

Guiding Questions

Regulation of financial institutions and financial markets

  • Is there an independent financial regulator who has oversight over all financial institutions?
  • Does any regulator have oversight over financial markets?
  • Does any regulator have the power to fine or shut down financial institutions who are not complying with regulation.
  • Are short term loan providers appropriately regulated?
  • Are there regulations regarding the number of times loans can be 'rolled-over'?
  • Are lenders required to assess whether any loans made are affordable based on applicants income and other debt repayment commitments?
  • Are there regulations that require lenders to provide transparent information to potential borrowers on the full amount that will need to be repaid in relation to any loan application?

Financial inclusion

  • What share of individuals do not have a bank account in their own name, by gender and age?
  • Are banks required to offer basic bank accounts open to all?
  • Are there organisations which provide unsecured loans, such as microcredit, to those unable to borrow from commercial financial institutions due to lack of collatoral?
  • Is microcredit available to women as well as men?
  • Are debt advice services freely available for overindebted households?
  • Is public expenditure available to fund debt advice services?

Indicators

Potential indicators to monitor the drivers of inequalities in this main driver category

  • Number of financial institutions who have received written warning regarding breach of regulations in relation to products or services sold
  • % of women who hold a bank account in their own name
  • % of married/co-habiting women named on mortgage agreement
  • Share of financial loans classified as short-term high cost loans
  • Public expenditure on debt relief and debt advice services
  • Share of financial loans regarded as informal (unregulated money lenders)

Candidate Policies

To see related Candidate Policies in this main driver category please click here.