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Social Networks: Their Role in Access to Financial Services in Britain

Author

Listed:
  • Pamela Meadows

    (p.meadows@niesr.ac.uk)

  • Paul Ormerod

    (Volterra Consulting Ltd.)

  • William Cook

    (Volterra Consulting Ltd.)

Abstract

Almost one in ten adults in Britain do not use mainstream financial services. Most of them are not in paid employment. However, most people without paid work have accounts. Two hypotheses have been put forward: (i) reluctance by financial institutions to serve low-income customers; and (ii) information failure on the part of non-consumers. Using two different data sources, we find that non-consumers of financial services are distinguishable from consumers only by belonging to social networks where financial services usage is relatively low. As social networks play a key role in transmitting information, this supports the information failure hypothesis.

Suggested Citation

  • Pamela Meadows & Paul Ormerod & William Cook, 2004. "Social Networks: Their Role in Access to Financial Services in Britain," National Institute Economic Review, National Institute of Economic and Social Research, vol. 189(1), pages 99-109, July.
    • Handle: RePEc:sae:niesru:v:189:y:2004:i:1:p:99-109
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    Cited by:

    1. Anna Nagurney & Tina Wakolbinger & Li Zhao, 2006. "The Evolution and Emergence of Integrated Social and Financial Networks with Electronic Transactions: A Dynamic Supernetwork Theory for the Modeling, Analysis, and Computation of Financial Flows and R," Computational Economics, Springer;Society for Computational Economics, vol. 27(2), pages 353-393, May.
    2. Loutfi, Ahmad Amine, 2022. "A framework for evaluating the business deployability of digital footprint based models for consumer credit," Journal of Business Research, Elsevier, vol. 152(C), pages 473-486.
    3. Ormerod, Paul, 2007. "Extracting deep information from limited observations on an evolved social network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 378(1), pages 48-52.

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