Bank Ownership and Use of Banking Services - Evidence from the Transition Countries

This paper documents significant cross-country variation in the use of financial services by households in Central and Eastern Europe. We find that the use of banking services increases in income and education in most countries and some evidence for an urban-rural gap, as well as a role for religion and trust. We find no evidence that the use of banking services is lower in countries with a higher share of government-owned banks, while a larger share of households uses debit or credit cards in countries with a higher share of foreign banks. We find distributional implications of bank ownership, with high-income households benefiting more from foreign bank entry and receivers of transfer income less; state ownership banks does not seem to benefit any specific group, while homeowners are less likely to use banking services in countries with higher government ownership of banks.