A new study conducted by two economists from a major banking institution says that municipal broadband networks contribute significantly to helping low income households gain access to banking services.
Major Findings, And Why Does This Matter?
The researchers concluded that access to the Internet is a more significant predictor of access to banking services (specifically, having a bank account) than both race and education level. They found that when low income families get access to Internet service, their likelihood of having access to banking services increases by 10%.
Economists commonly focus on access to banking services as a key indicator of financial inclusion for low income households. A bank account enables basic human stability and prosperity as it facilitates financial planning, paying for recurring expenses, and allays negative effects of unexpected financial shortfalls from traumatic events. Bank accounts also allow individuals to build working capital and financing for small business enterprises.
Financial inclusion is a significant concern not just in developing nations but in some wealthy countries as well. Currently, the U.S. ranks 23rd out of 38 high-income nations on the World Bank’s Global Financial Inclusion Database.
Municipal Networks: Catalysts For Equal Opportunity
The authors suggest that in addition to directly improving Internet access through better availability, municipal networks improve Internet access by improving local Internet service competition. They note that collaborative efforts between local governments and private industry can also improve Internet access and financial inclusiveness.
What can be done to advance the goal of getting fast, affordable, reliable Internet access - and access to banking - for all? The authors of the study suggest that municipal broadband projects in particular increase the likelihood that everyone, regardless of... Read more