nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2019‒03‒25
six papers chosen by

  1. Impacts of Financial Literacy on the Loan Decisions of Financially Excluded Households in the People's Republic of China By Lyons, Angela C.; Grable, John E.; Zeng, Ting
  2. Determinants and Impacts of Financial Literacy in the Lao PDR By Morgan, Peter J.; Trinh, Long Q.
  3. Determinants of Personal Financial Literacy among Young Adults in Malaysian Accounting Firms By Kwee Kim Peong
  4. Financial inclusion and macroeconomic stability in emerging and frontier markets By Anh The Vo; Loan Thi-Hong Van; Duc Hong Vo; Michael McAleer
  5. Financial aspects of the inclusive growth model of the modern economy By Danilov, Yuriy (Данилов, Юрий Алексеевич); Pivovarov, Danil (Пивоваров, Данил)
  6. Do Social Enterprises Walk the Talk? Assessing Microfinance Performances with Mission Statements By Roy Mersland; Samuel Anokye Nyarko; Ariane Szafarz

  1. By: Lyons, Angela C. (Asian Development Bank Institute); Grable, John E. (Asian Development Bank Institute); Zeng, Ting (Asian Development Bank Institute)
    Abstract: Financial literacy is a key tool being used to bring economically vulnerable populations into the financial mainstream. Data from the 2013 China Household Finance Survey (CHFS) were used to investigate the impacts of various dimensions of financial literacy on the use of bank and non-bank loans among rural, illiterate, and migrant populations in the People’s Republic of China. The findings show that the most vulnerable groups may be less likely to benefit from financial literacy, especially when it comes to usage of formal bank loans. Other factors such as those related to social networks and infrastructure may matter more than financial literacy. Results were found to vary across measures of financial literacy and financial inclusion. The findings suggest that barriers to access likely need to be overcome so that financial literacy can be more effective. The current study provides important insights for policy makers and international organizations designing national strategies to improve financial inclusion via financial literacy, especially for populations that have been traditionally excluded. Researchers are encouraged to reexamine previous definitions and measures of financial literacy and inclusion to develop a better understanding of the relationship between the two dimensions.
    Keywords: financial literacy; financial inclusion; loan usage; financially vulnerable populations; People’s Republic of China
    JEL: D12 D14 G21 G23 O17
    Date: 2019–02–20
  2. By: Morgan, Peter J. (Asian Development Bank Institute); Trinh, Long Q. (Asian Development Bank Institute)
    Abstract: However, internationally comparable information on financial literacy is still scarce. The Organisation for Economic Cooperation and Development International Network on Financial Education (OECD/INFE) survey of adult financial literacy is a standardized survey instrument, but so far has mainly been implemented in higher-income countries outside of Asia. Our paper extends the literature by conducting the survey in a relatively low-income Asian economy—the Lao PDR—and analyzing the determinants of financial literacy and the effects of financial literacy on other behaviors. We also compare these results with those of our earlier study of financial literacy in Cambodia and Viet Nam. This study of the Lao PDR extends our research in the Cambodia-Lao PDR-Myanmar-Viet Nam (CLMV) region, and the survey was broadened to include more variables that could be used as effective instrumental variables for financial literacy to deal with possible endogeneity problems. This increases our confidence in our findings that financial literacy positively affects both savings and financial inclusion.
    Keywords: financial literacy; financial behavior; financial inclusion; household saving; Cambodia; Lao PDR; Viet Nam
    JEL: D14 G11 J26
    Date: 2019–03–06
  3. By: Kwee Kim Peong (Faculty of Business, Multimedia University, Malaysia Author-2-Name: Kwee Peng Peong Author-2-Workplace-Name: Faculty of Business, Multimedia University, Malaysia Author-3-Name: Kwee Peng Peong Author-3-Workplace-Name: MLK Management Services, Jalan TTC Taman Teknologi Cheng, 75250 Malacca, Malaysia Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: Objective - In the twenty-first century, financial competencies are an essential tool in understanding the connection between financial behaviour and knowledge of individual financial problems. High financial knowledge may encourage young adults to carry less debt, increase their wealth and have a better financial retirement plan. According to Wolla (2017), less than one-third of youths have basic financial knowledge. This will have an impact to their lifelong financial well-being. Hence, this research intends to explore the personal financial literacy of young adults in Malaysian accounting firms. Methodology/Technique - The study examines 150 young working adults between the ages of 18-35 years old, working in accounting firms in Malacca, Malaysia. Stratified sampling and convenience sampling techniques were used to distribute questionnaires. Descriptive statistics, Pearson correlation coefficient and multiple regression analyses were also employed. Findings - The empirical findings show that geographical locations and family characteristics are significantly related to the personal financial literacy of young adults in accounting firms in Malacca. However, financial education and financial experience do not influence young adults in their financial decision making. Novelty - The results of this study suggest that the relevant authority should take an appropriate action to improve the financial well-being of young adults in Malacca, Malaysia.
    Keywords: Financial Literacy; Financial Education; Financial Experience; Family Characteristics; Geographical Location.
    JEL: M40 M41 M49
    Date: 2019–02–21
  4. By: Anh The Vo (Business and Economics Research Group. Ho Chi Minh City Open University. Vietnam.); Loan Thi-Hong Van (Business and Economics Research Group. Ho Chi Minh City Open University. Vietnam.); Duc Hong Vo (Business and Economics Research Group. Ho Chi Minh City Open University. Vietnam.); Michael McAleer (Department of Quantitative Finance National Tsing Hua University, Taiwan and Econometric Institute Erasmus School of Economics Erasmus University Rotterdam, The Netherlands and Department of Quantitative Economics Complutense University of Madrid, Spain And Institute of Advanced Sciences Yokohama National University, Japan.)
    Abstract: Financial inclusion, being considered as a key enabler to reducing poverty and boosting prosperity in emerging and frontier markets such as Vietnam, is the process in which individuals and small businesses are provided with an access to useful and affordable financial products and services. The extant literature on the empirical evidence regarding the contribution of financial inclusion to macroeconomic stability is mixed. This paper investigates the linkages between financial inclusion and macroeconomic stability, which has not yet been thoroughly examined in the literature, for 22 emerging and frontier economies from 2008 to 2015, with particular focus on a potential optimal level. Using the panel threshold estimation technique, the empirical findings show that financial inclusion, as approximated by the growth rate in the number of bank branches over 100,000 account holders, is found to enhance financial stability under a certain threshold. Financial inclusion is also found to be of benefit to maintaining stable inflation and output growth. Policy implications are also discussed on the basis of the important empirical findings.
    Keywords: Financial inclusion; Macroeconomic stability; Panel threshold; Emerging and frontier markets.
    JEL: C62 O16 P45
  5. By: Danilov, Yuriy (Данилов, Юрий Алексеевич) (The Russian Presidential Academy of National Economy and Public Administration); Pivovarov, Danil (Пивоваров, Данил) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The paper examines the problems of financial inclusion, considered as a prerequisite for the formation of an inclusive growth model (“growth for all”). The paper presents results of calculations of the mutual dependence of financial inclusion and financial stability; financial inclusion and financial sector performance; financial inclusion and financial structure; financial inclusion and economic dynamics. Authors evaluate the financial inclusion of the Russian banking sector and financial markets, including the first assessment of the inclusion in the primary securities markets and its impact on the economic dynamics and investment activity of enterprises. And authors formulate recommendations for economic policy in the financial sector.
    Date: 2019–03
  6. By: Roy Mersland; Samuel Anokye Nyarko; Ariane Szafarz
    Abstract: We study mission drift in social enterprises by examining whether these organizations stick to the actual mission enshrined in their mission statements. We use data from microfinance organizations (MFOs), a homogeneous group of social enterprises which have been scrutinized—and sometimes criticized—for mission drift. We focus on three publicly recognized and non-mutually-exclusive microfinance social missions identified by previous studies: poverty alleviation, women's empowerment, and rural financial inclusion. Based on hand-collected data from 199 MFOs worldwide, our results suggest strong coherence between social missions and actual practices. Hence, we argue that, with respect to MFOs’ own stated social missions, mission drift is no serious concern. The trustworthiness of social mission statements makes them suitable evaluation tools for social enterprises.
    Keywords: Mission statement; Mission drift; Microfinance; Social enterprise; Content analysis
    JEL: G21 G23 G28 G32 L21 O50 P36
    Date: 2019–03–13

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