nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2019‒10‒28
four papers chosen by

  1. Consumer's Financial Literacy and Financial Troubles: Based on the 2016 Survey on Financial Literacy and Financial Troubles By Nobuyoshi Yamori; Hitoe Ueyama
  2. The viability of the bank advisory service business model - effects of customers' trust, satisfaction and loyalty on client-level performance By Eriksson, Kent; Hermansson, Cecilia; Jonsson, Sara
  4. Inequality and Gender Inclusion: Minimum ICT Policy Thresholds for Promoting Female Employment in Sub-Saharan Africa By Simplice A. Asongu; Nicholas M. Odhiambo

  1. By: Nobuyoshi Yamori (Research Institute for Economics and Business Administration, Kobe University, Japan); Hitoe Ueyama (Faculty of Economics, Nagoya Gakuin University, Japan; Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)
    Abstract: We conducted "Survey on financial literacy and financial troubles" in September 2016. The survey asked a wide range of questions about financial troubles and financial literacy as well as financial and economic education experiences for 2,700 people. This paper analyzes the characteristics of people who suffer financial troubles from the viewpoint of financial literacy by using the results of this survey. To the best of our knowledge, our paper is pioneering as few papers quantitatively analyze how financial literacy is related to experiences of financial troubles. According to our results, we could not find a clear tendency that people with higher financial literacy are less likely to experience financial troubles. This unexpected result is because some types of financial troubles tend to be experienced by people with higher financial literacy. Conversely, we found financial troubles that people with low financial literacy tend to experience. Also, we found that many people have not experienced financial troubles so far, not because they are financially literate, but simply because they do not use various financial services.
  2. By: Eriksson, Kent (Department of Real Estate and Construction Management, Royal Institute of Technology); Hermansson, Cecilia (Department of Real Estate and Construction Management, Royal Institute of Technology); Jonsson, Sara (Stockholm University)
    Abstract: This paper investigates the viability of the relationship-oriented business model of the bank advisory service function and tests its viability considering differences in clients’ risk tolerance and financial literacy. Specifically, it investigates the effects of bank customers’ satisfaction, loyalty, and trust in bank advisors on two client level performance measures; client level non-interest revenue and client-level revenue on net interest spread. It further investigates how effects are moderated by differences in clients’ risk tolerance and financial literacy. The findings are based on analyzes of a data set that combines survey data (collected from 13,525 bank clients in 2013) with bank record data from each respondent. The cross sectional data is analyzed using OLS- regression and structural equation modeling. Findings show that trust has a positive direct effect on client level non-interest revenue. Further, trust mediates the entire impact of satisfaction and loyalty on client-level non-interest revenue. Customer satisfaction and loyalty do not lead to enhanced client-level non-interest revenue if there is limited trust in bank advisors. Findings further show that the relevance of trust for non-interest revenue is higher for clients with high risk tolerance and high financial literacy. Satisfaction, loyalty, and trust have no effect, however, on client-level revenue on net interest rate spread.
    Keywords: bank; revenue; trust; satisfaction; loyalty; financial literacy; financial risk tolerance
    JEL: G21 M21
    Date: 2019–10–18
  3. By: Aniceth Kato Mpanju (Tanzania Institute of Accountancy)
    Abstract: The major purpose of this paper is to analyze the impact of microfinance services on SME?s performance in Dar-es-Salaam region, Tanzania. Using a sample of 350 SMEs, the study adopted a descriptive-correlation research design an econometric analysis using statistical package for social sciences (SPSS) version 24. The results show that microfinance services in the form of financial intermediation and enterprise development had to a large extent adequate to small and medium-sized entrepreneurs. Then from above analysis we may conclude that there existed a strong relationship between the extent of microfinance services and the performance of SMEs and that microfinance services influenced the performance of the SMEs in the Dar-es-Salaam region.
    Keywords: Microfinance services, SMEs, Microfinance institutions, Financial literacy and enterprise development
    JEL: G29
    Date: 2019–10
  4. By: Simplice A. Asongu (Yaoundé/Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: The study assesses how ICT modulates the effect of inequality on female economic participation in a panel of 42 countries in sub-Saharan Africa over the period 2004-2014. Three inequality indicators are used, namely: the Gini coefficient, the Atkinson index and the Palma ratio. The adopted ICT indicators are mobile phone penetration, internet penetration and fixed broadband subscriptions. Three gender economic inclusion indicators are also used for the analysis, namely: female labour force participation, female unemployment and female employment. The Generalised Method of Moments is employed as empirical strategy. The findings show that enhancing ICT beyond certain thresholds is necessary for ICT to mitigate inequality in order to enhance gender economic participation. First, for female labour force participation, a minimum threshold of 165.714 mobile phone penetration per 100 people is required for the Palma ratio. Second, minimum ICT thresholds for the reduction of female unemployment are: (i) 87.783, 107.486 and 152.500 mobile phone penetration per 100 people for respectively, the Gini coefficient, the Atkinson index and the Palma ratio; (ii) 39.618 internet penetration per 100 people for the Atkinson index and (iii) 4.500 fixed broadband subscriptions for the Palma ratio. Third, the corresponding ICT thresholds for the promotion of female employment are: (i) 120.369 and 85.533 mobile phone penetration per 100 people for respectively, the Gini coefficient and the Atkinson index and (ii) 30.005 internet penetration per 100 people for the Gini coefficient. The established thresholds make economic sense and can be feasibly implemented by policy makers in order to induce favourable effects on gender economic inclusion dynamics.
    Keywords: Africa; ICT; Gender; Inclusive development
    JEL: G20 I10 I32 O40 O55
    Date: 2019–01

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