Methodological Approaches to Analyse Financial Exclusion from an Urban Perspective

This paper aims to appraise the problem of financial exclusion in Spain after the process of banking system restructuration. The paper proposes a theoretical model for explaining the phenomenon of financial exclusion including both “access difficulties” and “difficulties in the use of financial services” as two dimensions that should be jointly considered. The main contribution of this paper is that it broadens the scope of financial exclusion from a theoretical and empirical point of view, and it also analyses the financial exclusion phenomenon at lower units of analysis that have not been previously explored: urban districts and municipalities. We considered Madrid and Barcelona as our scenarios of analysis. The methodological procedure was carried out in two steps: we first validate our theoretical model by applying canonical correlations, and secondly we carried out Quantile Regressions (QR) to estimate the different impact of financial exclusion’s predictors at different points of the empirical distribution. The empirical results indicate a trend towards low-cost retail banking to serve the segment of less profitable customers and a pattern of branch disappearance more pronounced in those territories vulnerable from a socioeconomic point of view.