nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2018‒12‒10
two papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Inclusion financière, frictions financières et croissance économique By EZZAHID, Elhadj; ELOUAOURTI, Zakaria
  2. Financial Inclusion, Shocks and Poverty: Evidence from the Expansion of Mobile Money in Tanzania By Abiona, Olukorede; Foureaux Koppensteiner, Martin

  1. By: EZZAHID, Elhadj; ELOUAOURTI, Zakaria
    Abstract: This article develops an analytical growth model that integrates the financial sector, the part of individuals acceding to financial systems, frictions related to the enforceability of contracts and the constraints related to the costs of information on production processes. Our model considers an economy with three categories of individuals. The first includes individuals excluded from the financial system. The second includes individuals included but with constraints due to the costs of researching information on the quality of projects. The individuals of the third category accede with less constraint than the second category and more chances that the financial contracts to which they subscribe will be executed. Based on the model simulation, the quantity of resources directed to firms increase when the financial system becomes inclusive. Our model is original in nature and provides analytical and empirical evidence on the negative impact of financial exclusion on economic growth, and highlighted the vital role of financial inclusion in economic growth. As for the enforceability of contracts concluded on the credit market, it stimulates the proportion of resources invested by the agents of the three categories.
    Keywords: Financial inclusion, financial frictions and economic growth.
    JEL: C02 G2
    Date: 2018–11–21
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:90165&r=fle
  2. By: Abiona, Olukorede (University of Leicester); Foureaux Koppensteiner, Martin (University of Leicester)
    Abstract: We estimate the effect of mobile money adoption on consumption smoothing, poverty and human capital investments in Tanzania. We exploit the rapid expansion of the mobile money agent network between 2010 and 2012 and combine this with idiosyncratic shocks from variation in rainfall over time and across space in an instrumented DiD methodology. We find that adopter households are able to smooth consumption during periods of shocks and maintain their investments in human capital. Results on time use of children and labor force participation complement the findings on the important role of mobile money for the intergenerational transmission of poverty.
    Keywords: mobile money, household shocks, rainfall, poverty, human capital accumulation, Tanzania
    JEL: G23 H31 I31 I32
    Date: 2018–10
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp11928&r=fle

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