The Impact of Geographical Factors on the Banking Sector in El Salvador
This study explores how geographical factors shape El Salvador’s banking sector, particularly focusing on regional disparities, urbanization, and vulnerability to natural disasters affecting access to financial services. By employing a mixed-methods approach that combines quantitative data and quali...
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| Language: | English |
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MDPI AG
2025-06-01
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| Series: | International Journal of Financial Studies |
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| Online Access: | https://www.mdpi.com/2227-7072/13/2/110 |
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| author | Anders Lundvig Hansen Luís Lima Santos |
| author_facet | Anders Lundvig Hansen Luís Lima Santos |
| author_sort | Anders Lundvig Hansen |
| collection | DOAJ |
| description | This study explores how geographical factors shape El Salvador’s banking sector, particularly focusing on regional disparities, urbanization, and vulnerability to natural disasters affecting access to financial services. By employing a mixed-methods approach that combines quantitative data and qualitative interviews, the research analyzes how these geographical challenges impact financial inclusion and banking development. Data from the Central Reserve Bank of El Salvador and financial institutions is examined alongside Geographic Information Systems (GISs) to illustrate the spatial distribution of banking services. Interviews with stakeholders, including bank representatives and clients from urban and rural areas, reveal a significant urban–rural divide, with approximately 75% of bank branches and 80% of ATMs situated in urban centers, particularly in San Salvador. Rural areas face limited access to formal banking due to challenging topography and inadequate infrastructure, leading to increased financial exclusion and reliance on informal systems. Natural disasters further disrupt banking infrastructure and heighten the need for emergency loans. While urbanization has spurred financial growth, it has also resulted in informal settlements with restricted access to formal services. As its main contribution, this study provides one of the first in-depth, geographically grounded analyses of financial exclusion in El Salvador, offering original insights into how spatial inequalities and disaster vulnerability intersect to shape banking access and economic participation. The study calls for a more inclusive banking sector, recommending mobile and digital banking expansion, agent banking in underserved areas, and improved disaster risk management to enhance economic participation across all regions. |
| format | Article |
| id | doaj-art-abf90c398a8e43dabbe17fb445a68149 |
| institution | Kabale University |
| issn | 2227-7072 |
| language | English |
| publishDate | 2025-06-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | International Journal of Financial Studies |
| spelling | doaj-art-abf90c398a8e43dabbe17fb445a681492025-08-20T03:27:29ZengMDPI AGInternational Journal of Financial Studies2227-70722025-06-0113211010.3390/ijfs13020110The Impact of Geographical Factors on the Banking Sector in El SalvadorAnders Lundvig Hansen0Luís Lima Santos1The Salford School of Business, University of Salford, 43 Cresent, Salford M5 4WT, UKCiTUR—Centre for Tourism Research, Development and Innovation, Polytechnic University of Leiria, 2411-901 Leiria, PortugalThis study explores how geographical factors shape El Salvador’s banking sector, particularly focusing on regional disparities, urbanization, and vulnerability to natural disasters affecting access to financial services. By employing a mixed-methods approach that combines quantitative data and qualitative interviews, the research analyzes how these geographical challenges impact financial inclusion and banking development. Data from the Central Reserve Bank of El Salvador and financial institutions is examined alongside Geographic Information Systems (GISs) to illustrate the spatial distribution of banking services. Interviews with stakeholders, including bank representatives and clients from urban and rural areas, reveal a significant urban–rural divide, with approximately 75% of bank branches and 80% of ATMs situated in urban centers, particularly in San Salvador. Rural areas face limited access to formal banking due to challenging topography and inadequate infrastructure, leading to increased financial exclusion and reliance on informal systems. Natural disasters further disrupt banking infrastructure and heighten the need for emergency loans. While urbanization has spurred financial growth, it has also resulted in informal settlements with restricted access to formal services. As its main contribution, this study provides one of the first in-depth, geographically grounded analyses of financial exclusion in El Salvador, offering original insights into how spatial inequalities and disaster vulnerability intersect to shape banking access and economic participation. The study calls for a more inclusive banking sector, recommending mobile and digital banking expansion, agent banking in underserved areas, and improved disaster risk management to enhance economic participation across all regions.https://www.mdpi.com/2227-7072/13/2/110financial inclusiongeographical factorsbanking sectorurban–rural divisionEl Salvador |
| spellingShingle | Anders Lundvig Hansen Luís Lima Santos The Impact of Geographical Factors on the Banking Sector in El Salvador International Journal of Financial Studies financial inclusion geographical factors banking sector urban–rural division El Salvador |
| title | The Impact of Geographical Factors on the Banking Sector in El Salvador |
| title_full | The Impact of Geographical Factors on the Banking Sector in El Salvador |
| title_fullStr | The Impact of Geographical Factors on the Banking Sector in El Salvador |
| title_full_unstemmed | The Impact of Geographical Factors on the Banking Sector in El Salvador |
| title_short | The Impact of Geographical Factors on the Banking Sector in El Salvador |
| title_sort | impact of geographical factors on the banking sector in el salvador |
| topic | financial inclusion geographical factors banking sector urban–rural division El Salvador |
| url | https://www.mdpi.com/2227-7072/13/2/110 |
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