nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2019‒02‒18
three papers chosen by

  1. Friends or foes? Mobile money interaction with formal and informal finance By Serge Ky; Clovis Rugemintwari; Alain Sauviat
  2. Does Financial Regulation Unintentionally Ignore Less Privileged Populations? The Investigation of a Regulatory Fintech Advancement, Objective and Subjective Financial Literacy By Maya Haran Rosen; Orly Sade
  3. Existing and potential solutions to reduce financial exclusion - theoretical considerations and practical initiatives at the meeting point of finance and ethics By Győri, Zsuzsanna

  1. By: Serge Ky (LAPE - Laboratoire d'Analyse et de Prospective Economique - IR SHS UNILIM - Institut Sciences de l'Homme et de la Société - UNILIM - Université de Limoges); Clovis Rugemintwari (LAPE - Laboratoire d'Analyse et de Prospective Economique - IR SHS UNILIM - Institut Sciences de l'Homme et de la Société - UNILIM - Université de Limoges); Alain Sauviat (LAPE - Laboratoire d'Analyse et de Prospective Economique - IR SHS UNILIM - Institut Sciences de l'Homme et de la Société - UNILIM - Université de Limoges)
    Abstract: Access to and usage of formal financial services are important determinants of financial inclusion and yet, informal mechanisms still dominate the financial system in developing countries. In this context, the purpose of our paper is to investigate how the growing effort to harness mobile money may play a role to overcome barriers that prevent people to access formal financial services. Using a unique dataset obtained from an individual-level survey conducted in Burkina Faso, we explore the interplay between mobile money innovation as a deposit instrument and pre-existing formal and informal financial instruments. Our main findings show that, overall, the use of mobile money is not associated with deposits using formal and/or informal financial instruments. However, a closer investigation reveals suggestive evidence that it increases the probability of participants in informal mechanisms to make deposits in a bank account. Moreover, considering disadvantaged groups, we find for women, irregular income and less educated individuals that mobile money may increase their probability to make deposits in a bank and/or credit union accounts. Given the low access to formal financial services in developing countries, our findings taken together indicate how the increasing adoption of mobile money may act as a stepping-stone towards financial inclusion.
    Keywords: developing countries †,financial inclusion,mobile money,formal finance,informal finance,deposit behavior
    Date: 2019–02–06
  2. By: Maya Haran Rosen; Orly Sade
    Abstract: Define contribution mechanism combined with a dynamic job market can affect the sum of retirement savings and the choices of plans and products. Hence, it is important for regulators to engage servers to manage the accounts they accumulate over the years. In 2013-2014 the Israeli regulator reached out to the population, recommending the use of a website to help individuals find inactive retirement savings accounts and close them (withdraw the savings or transfer them to active accounts). The government's efforts did not result in the closure of most of the inactive accounts. Proprietary data indicate that those who closed the inactive accounts live in central locations with a higher socioeconomic index. Survey data indicate that those who lacked financial literacy and confidence in their financial knowledge were less likely to take financial actions. Using a controlled field experiment, we also provide evidence that an intervention with a human touch can promote greater involvement.
    Date: 2019
  3. By: Győri, Zsuzsanna
    Abstract: Banks and financial intermediators are motivated in two ways in socially responsible activities: we call them moral and business case. On the one hand, it is their moral obligation to serve the welfare and well-being of the whole society, as explained in the stakeholder theory: a company is not only responsible for its owners but must also consider and report its impact on other groups concerned. Expecting multidimensional value creation can be applied even more to financial intermediators than other economic actors, considering their important role as informal regulator and catalyst in the modern economy. On the other hand, they also have a business interest in responding to social and environmental changes as they can increase their competitiveness and business position: they can reduce conflicts of interest between owners and managers, make consumers more committed, motivate employees, and co-operate with other business partners. The state of the environment and society, the strengthening of the community's goals and the changing economic environment create a foundation and a pressure for the strengthening of ethical, values-based financial activities – based on both motivational factors – even in government regulations. In this paper, I present the development of the CSR in banking sector, the theoretical and practical terms that have emerged from that, focusing on the initiatives that can be linked to financial inclusion in the practice of Global Alliance of Banking on Values’ member banks.
    Keywords: social banking, values-based banking, financial inclusion, GABV
    JEL: G21
    Date: 2019–02–07

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