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on Community banking and credit unions |
| By: | Ozili, Peterson K |
| Abstract: | This article explores financial inclusion and the increase in formal account inactivity. It examines the formal account inactivity problem, how it delays the benefits of financial inclusion, the risks posed by formal account inactivity and solutions to reduce formal account inactivity. It was argued that countries with a high level of financial inclusion, in terms of formal account ownership, will reap the benefits that accompany financial inclusion which includes poverty reduction, stimulating entrepreneurship, increased financial security, reduced economic inequality, improved wellbeing and increased economic growth. However, these benefits may not be realized if there is an increasing number of inactive formal accounts. |
| Keywords: | financial inclusion, inactive formal accounts, account inactivity, digital financial inclusion, mobile money account, bank account, risk, dormant account |
| JEL: | G20 G21 G23 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128973 |
| By: | Ozili, Peterson K |
| Abstract: | Accelerating digital finance transformation initiatives across African countries is essential to develop the African continent. Using the conceptual discourse method and the global findex data, this article explores the on-going digital finance transformation in Africa, the benefits for digital financial inclusion in Africa as well as the challenges that lie ahead. The article emphasises the importance of the digital finance transformation in Africa and urges for coordination with stakeholders to accelerate the use of digital financial services in African countries. It also emphasises the need to balance digital finance transformation initiatives with the risks. This study contributes to ongoing discussions about the role of digital finance in transforming nations. |
| Keywords: | digital finance, financial inclusion, Africa, open banking, digital financial inclusion, fintech, digital public infrastructure, DPI, mobile money, financial literacy, MPesa, eNaira, flutterwave |
| JEL: | G21 G23 O3 O31 O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128972 |
| By: | Yoon Jae Ro (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | India is undergoing a major digital transformation through its government-backed Digital Public Infrastructure (DPI), which has notably enhanced financial inclusion and made public services more accessible. Key innovations like digital IDs and mobile payment systems have helped millions. Yet, gaps in digital access persist, indicating the need for targeted efforts—especially in underserved areas. This opens up valuable opportunities for South Korea and India to collaborate, combining their strengths in technology to bridge these divides and support inclusive digital growth. |
| Keywords: | India; Digital Transformation; DPI |
| Date: | 2025–07–17 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kiepwe:022492 |
| By: | Arvind Ashta |
| Abstract: | Artificial intelligence (AI) is emerging as a transformative force in microfinance and financial inclusion, addressing long-standing barriers such as credit invisibility, high operational costs, and limited access to formal financial services. This paper systematically examines AI applications across key financial domains (payments, savings, lending, insurance, investments) highlighting how machine learning, natural language processing, and generative AI are enabling innovative solutions tailored to the needs of marginalized populations. Drawing on contemporary research and case studies from the Global South, the analysis demonstrates AI’s potential to democratize financial services through alternative credit scoring, automated underwriting, and adaptive tools. However, the deployment of AI also presents significant challenges, including algorithmic bias, proxy discrimination, privacy violations, and the risk of exacerbating digital divides. The paper underscores the need for robust governance frameworks, ethical oversight, and inclusive policies to mitigate these risks and ensure that AI-driven financial inclusion serves the most vulnerable without creating new forms of exclusion. Future directions include advancing fairness-aware AI, improving transparency, and fostering cross-sector collaboration to align technological innovation with social justice and human dignity. |
| Keywords: | Artificial Intelligence; Microfinance; Financial Inclusion; Machine Learning; Alternative Credit Scoring; Algorithmic Bias; Digital Divide; Ethical AI; Global South |
| JEL: | G21 G23 O16 O33 D81 I25 C45 C55 |
| Date: | 2026–06–05 |
| URL: | https://d.repec.org/n?u=RePEc:sol:wpaper:2013/408010 |
| By: | DIAKITE, Nanamoudou; DIALLO, Ibrahima; SENE, Omar; SENE, Babacar |
| Abstract: | This paper examines whether mobile money reduces gender gaps in financial autonomy across six Sahelian countries using Afrobarometer Round 9 data (2021-2023, N=6, 540). Instrumenting adoption with distance to traditional financial services, we find pronounced heterogeneity: mobile money increases women's autonomy by 11 percentage points in Senegal (26% gap reduction) and 16 points in Sudan (38% reduction), with no detectable effects in four other countries. This variation correlates with ecosystem maturity, agent density, and regulatory quality. Mechanisms include transactional discretion, informal credit access, and enhanced security. Transformative impacts require 10-14 years ecosystem maturation and agent density above 1 per 2, 000 inhabitants. Digital finance advances women's empowerment only under specific institutional conditions. |
| Keywords: | Mobile money; Gender; Financial inclusion; Instrumental variables; Sub-Saharan Africa; Sahel; Women empowerment; Heterogeneous effects |
| JEL: | G21 J16 O33 O55 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:129244 |
| By: | Yoshiaki Ogura (Waseda University) |
| Abstract: | We investigate the effect of regional bank mergers in Japan since the 2000s by applying the DID-event study design. From the estimation we find the following tendency. First, any type of merger reduces costs. Second, no competition reduction effects are found both in loan markets and deposit markets in any type of merger. Third, the cost reduction effect is passed through to users by reducing borrowing costs in any type of merger. Fourth, the cost reduction effect is larger in full-spec mergers than BHC establishments. These findings imply that the regional bank consolidations in Japan reduced operating costs of the regional banking sector without reducing competition. This implies that the regional bank consolidations were beneficial mainly for users. |
| Keywords: | regional banks, bank consolidations, bank holding companies |
| JEL: | G21 G34 L22 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:wap:wpaper:2533 |
| By: | Diego Fernando Cuesta-Mora; Fredy Alejandro Gamboa-Estrada; Camilo Eduardo Sánchez-Quinto |
| Abstract: | Colombia’s post-pandemic recovery in 2021–2022 was marked by rapid consumer credit growth, followed by deteriorating credit quality indicators amid tightening financial conditions. In January 2023, the Superintendence of Finance of Colombia (SFC) introduced higher provisioning requirements for long-term consumer loans to strengthen financial resilience and to help moderate the rapid expansion of consumer credit observed prior to the reform. From the perspective of credit institutions (CIs), increased provisions imply higher expenses and potential profitability pressures, which could lead to adjustments in lending strategies. This study evaluates the effect of that regulatory policy on consumer credit dynamics and CI soundness. We find that the measure increased CIs’ coverage ratios, indicating progress toward the policy´s resilience objective, but it did not significantly affect overall credit supply conditions for longer-maturity loans in terms of loan amounts, interest rates, and collateral requirements. However, these average effects mask notable heterogeneity across institutions. Smaller lenders tightened credit supply for loans exceeding 108 months by reducing loan amounts and lowering loan-to-value ratios, while larger lenders absorbed the higher provisioning costs without altering credit terms.*****ABSTRACT: Colombia’s post-pandemic recovery in 2021–2022 was marked by rapid consumer credit growth, followed by deteriorating credit quality indicators amid tightening financial conditions. In January 2023, the Superintendence of Finance of Colombia (SFC) introduced higher provisioning requirements for long-term consumer loans to strengthen financial resilience and to help moderate the rapid expansion of consumer credit observed prior to the reform. From the perspective of credit institutions (CIs), increased provisions imply higher expenses and potential profitability pressures, which could lead to adjustments in lending strategies. This study evaluates the effect of that regulatory policy on consumer credit dynamics and CI soundness. We find that the measure increased CIs’ coverage ratios, indicating progress toward the policy´s resilience objective, but it did not significantly affect overall credit supply conditions for longer-maturity loans in terms of loan amounts, interest rates, and collateral requirements. However, these average effects mask notable heterogeneity across institutions. Smaller lenders tightened credit supply for loans exceeding 108 months by reducing loan amounts and lowering loan-to-value ratios, while larger lenders absorbed the higher provisioning costs without altering credit terms. |
| Keywords: | Provisiones de crédito, oferta de crédito, Crédito de consumo, Resiliencia bancaria, Loan provisions, Credit supply, Consumer loans, Banks' resilience |
| JEL: | E51 E60 G21 G28 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:bdr:borrec:1356 |
| By: | Leight, Jessica; Clark, Anne Angsten; Reynolds, Katherine |
| Abstract: | As foreign aid declines, which interventions should we prioritize? Advocates of community-driven development (CDD) have long argued that we should ask this question of the communities and people whom aid is meant to serve. CDD provides village-level grants and facilitation that support communities in choosing and implementing the projects they consider local priorities, including basic health and education services, local infrastructure, income-generating activities, or other community priorities. In recent years, a growing body of evidence has begun to document and assess the effects of this approach. This brief and a companion brief1 synthesize findings from a range of rigorous evaluations to describe what we know about the multidimensional impacts of CDD in low- and middle-income contexts and highlight gaps that should be addressed in future research. Here, we focus on the effects of CDD on governance and collective action. |
| Keywords: | development aid; community development; governance; social capital; women's participation; collective action |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:prnote:182189 |