Abstract
Access to finance has been the focus of significant interest in recent years as there are warning signs suggesting that lack of access to credit has an adverse effect on growth and poverty alleviation. Furthermore, recent studies have shown that access to finance is positively correlated with productivity and competitiveness; therefore, it is an important consideration in terms of the poverty trap evident in developing countries. Using endogenous and exogenous variables from data derived from the Living Standards Measurement Study (LSMS 2005), this paper examines a conceptual background on the basis of new statistical evidence concerning access to credit and segmentation in Nicaragua. The core contribution of this study lies in the critical revision of the main constraints in terms of increasing financial access for the broad range of Nicaraguan households. Likewise, our analysis produces new empirical indications that challenge the monopolistic power that financial institutions have in this country.
