Poor people participate in markets as both consumers and providers. Markets work for the poor when poor people as consumers become able to access a desired product or service provided through a market. But, in any particular good or service market, what does effective access mean and who has it? How much will levels of access change in response to policy action or providers' strategies? Market-based solutions may well not reach all eligible people, in which case, what are the limits of the market and who is excluded? To answer questions like these, policy makers and providers need to be able to define and measure access both now and in the future. The access frontier approach described in this article provides a practical way of doing this. The approach rests on the segmentation of the entire potential market for a good or service into different zones using both demandand supply-side information. This article demonstrates the applications of the access frontier in a financial service market - transactional banking in South Africa - and demonstrates its implications for policy development and market strategy.
The financial sector has been an early site for the development and application of market development approaches, since the work of FinMark Trust in the early 2000s. But how does one know when a financial market is working well for the poor? Work to date has followed a clear theory of change based on increasing access to and usage of financial products through changing market systems. As poor customers use financial services, so they should be protected against shocks and enabled to climb out of poverty, in the process deepening and extending the financial system. However, as the goal of promoting financial inclusion has become mainstream policy in many countries, it has also become clearer that indicators of access and usage alone are necessary but not sufficient indicators of success. This paper seeks to highlight and present early results from an alternative application of a systemic approach which extends the linkages from access and usage to welfare changes which result, using the lens of financial health of users. This lens may have significant implications for focusing interventions and measurement in making markets work for the poor (M4P) programmes, emphasizing behaviour change over a narrow product focus only.