nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2017‒10‒01
four papers chosen by

  1. Financial Inclusion and Women Entrepreneurship: Evidence from Mexico By Fozan Fareed; Mabel Gabriel; Patrick Lenain; Julien Reynaud
  2. M-PESA and financial inclusion in Kenya: of paying comes saving? By Antoine Dubus; Leo Van Hove
  3. Why do financial inclusion policies fail in mobilizing savings from the poor ? Lessons from rural South India * By Jann Goedecke; Isabelle Guérin; Bert D 'Espallier; Govidan Venkatasubramanian
  4. Attention Manipulation and Information Overload By Persson, Petra

  1. By: Fozan Fareed (OECD); Mabel Gabriel (OECD); Patrick Lenain (OECD); Julien Reynaud (OECD)
    Abstract: Financial inclusion and women entrepreneurship concern policymakers because of their impact on job creation, economic growth and women empowerment. Women in Mexico do engage in paid work but many of them work in the informal sector because they lack opportunities to work in the formal sector. Moreover, financial exclusion rate in Mexico remains the highest amongst OECD countries, affecting women in particular. This paper uses an individual-based panel dataset over the period 2009-2015 to examine the determinants of women entrepreneurship in Mexico and to determine the relationship between women entrepreneurship and financial inclusion across informal and formal work and across economic sectors. The results suggest that financial inclusion is positively linked with entrepreneurship and it can open up economic opportunities for women entrepreneurs. Various financial access points like banking branches, POS terminals, banking agents, ATMs and microfinance banks can be a gateway to the use of additional financial services which can allow businesses development through access to credit facilities. However, the positive relationship between women entrepreneurship and financial inclusion does not hold for women entrepreneurs working in the informal sector or women working in the commerce sector, highlighting lower entry barriers, including financial, in the informal sector and problems pertaining to financial illiteracy. Results also highlight that the probability of a women being an entrepreneur in the informal sector is higher than in the formal sector. Education, age, income, marital status (married or divorced), and income level at the municipality level are amongst other significant determinants which are positively linked with women entrepreneurship. The results also highlight the existence of gender disparity in the status of entrepreneurship across formal and informal work in Mexico. On average, women are about 56% less likely to be entrepreneurs in the formal sector and 63% more likely to be entrepreneurs in the informal sector, as compared to men, after taking into account other relevant individual and municipality level characteristics that are important in explaining entrepreneurship.
    Keywords: financial access, financial exclusion, Financial inclusion, informality, SMEs, women entrepreneurship
    JEL: F14 F23 L16 O24
    Date: 2017–09–27
  2. By: Antoine Dubus (Télécom ParisTech); Leo Van Hove (VUB - Vrije Universiteit [Brussel])
    Abstract: Mobile financial services are said to promote inclusion. However, only 7.6 per cent of Kenyans have ever saved on an M-PESA account. This paper uses a novel, three-step probit analysis to identify the socio-demographic characteristics of, successively, respondents who do not have access to a SIM card, have access to a SIM but do not have an M-PESA account, and, finally, have an account but do not save on it. We find that those who are left behind are predominantly those who would benefit most from formal saving, namely the poor, the non-educated, and, in the final step, also women.
    Keywords: Kenya, mobile financial services,financial inclusion, saving, M-PESA
    Date: 2017–04–26
  3. By: Jann Goedecke (Kristianstad University - Kristianstad University, K.U.Leuven - K.U.Leuven); Isabelle Guérin (CESSMA - Centre d'études en sciences sociales sur les mondes africains, américains et asiatiques - Inalco - Institut National des Langues et Civilisations Orientales - UP7 - Université Paris Diderot - Paris 7 - Institut de recherche pour le développement , IFP - Institut Français de Pondichéry - Ministère des Affaires étrangères et européennes - CNRS - Centre National de la Recherche Scientifique); Bert D 'Espallier (K.U.Leuven - K.U.Leuven); Govidan Venkatasubramanian (IFP - Institut Français de Pondichéry - Ministère des Affaires étrangères et européennes - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Combining multivariate and qualitative analyses, this micro-level study suggests an explanation for the persistence of informal savings in rural South India despite publicly run large-scale programs to promote bank savings. Notably gold, but also ROSCAs and private lending, remain dominant forms of saving. We argue that cultural norms and social institutions such as social class and caste shape the nature, the propensity but also the opportunities to save. Gold serves multiple purposes, which are financial, economical, socio-cultural, and political. Furthermore, we find that Dalits’ (the lowest caste) preference for gold illustrates a relative emancipation of Dalits combined with the maintenance of prohibition related to caste which prevents them to invest in other assets such as land.
    Keywords: political economy, banks, microfinance, India,informal saving, financial inclusion, economic anthropology
    Date: 2016
  4. By: Persson, Petra
    Abstract: Limits on consumer attention give firms incentives to manipulate prospective buyers' allocation of attention. This paper models such attention manipulation and shows that it limits the ability of disclosure regulation to improve consumer welfare. Competitive information supply, from firms competing for attention, can reduce consumers' knowledge by causing information overload. A single firm subjected to a disclosure mandate may deliberately induce such information overload to obfuscate financially relevant information, or engage in product complexification to bound consumers' financial literacy. Thus, disclosure rules that would improve welfare for agents without attention limitations can prove ineffective for consumers with limited attention. Obfuscation suggests a role for rules that mandate not only the content but also the format of disclosure; however, even rules that mandate "easy-to-understand" formats can be ineffective against complexification, which may call for regulation of product design.
    Keywords: Complexity; consumer protection; Disclosure regulation; Information Overload; Persuasion; salience
    JEL: D11 D14 D18 D83
    Date: 2017–09

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.