The World Bank Group has two broad means to pursue its financial sector objectives: encouraging the reform of financial systems and supporting the development of individual financial institutions and markets.
The financial sector of a country has a great impact on development and poverty because:
- A well-functioning financial sector is essential for private sector-led growth, the most important driver of poverty reduction.
- Financial crises burden countries with crippling costs, hinder development, and increase poverty.
- A well-functioning financial sector provides the poor with access to credit and other financial services.
The World Bank works with client countries and partners to develop deep, broad, and efficient financial sectors that will be beneficial to all members of society, build capacity to lessen the potential for financial crises, and improve the integrity and credibility of financial institutions.
Helping countries achieve these goals, contributes to stronger and more stable national financial systems, thus supporting economic growth and poverty reduction in the Bank’s client countries.
The broad objectives of the Bank's financial sector work are to:
Contribute to growth and welfare, by ensuring the availability of a wide array of financial services and improving the integrity of financial systems;
Promote empowerment, by ensuring that these services are available to a wide array of the urban and rural poor, to Small & Medium Enterprises, and various minorities; and
Help prevent or minimize the impact of financial crises, which both cripple growth and inordinately hurt the poor.
Progress on how the Bank's financial sector work is contributing to poverty reduction will be measured in terms of the Bank’s overall progress in meeting the Millennium Development Goals (MDG #1).