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on Financial Literacy and Education |
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Issue of 2020‒03‒30
seven papers chosen by |
| By: | Metzger, Martina; Young, Brigitte |
| Abstract: | This paper first explores the role of digital financial services, e.g. mobile money systems and cryptocurrency-based systems, and their impact on the choice of migrants to send remittances. Secondly we discuss whether alternative remittances sending channels increase access to financial services for remittance-sending and remittance-receiving households. Africa, and in particularly Kenya, arepioneers in alternative money transfer systems and of tailor-made regulatory initiatives to address digital financial services. Thus,our paper focuses on the technologies of the Kenyan mobile money system, M-Pesa, and the major cryptocurrency, Bitcoin,and based on that takes into account selected experiences of other Sub-Saharan African countries. We find that in comparison to traditional remittances sending channels, mobile money transfer channels are often superior in terms of service-related features as costs of transfers for sending and receiving households, speed of delivery, availability and access to the remittances by receiving households or security of transactions. More importantly,mobile cash systems can fulfil the SDG goal of the 3 per cent fee more than 10 years earlier than envisaged in 2030. On the other side, the choice to use a specific transfer channel might be restricted by the lack of physical and technological availability of providers and means, and technological illiteracy. In addition, sending and receiving households might be cautious to use mobile cash system due to a lack of trust in the system, the providersor regulatory authorities. Accordingly, financial inclusion beyond e-payments and outreach to the poor is not an automatism. In contrast, the use of Bitcoin-based transfer systems is more ambivalent; these systems are technically more challenging both in terms of infrastructure and literacy and more vulnerable to fraud. Some findings also indicate that Bitcoin is anincompleteand inferior substitute to which migrants refer to if their first option is not available or suffers from severe deficiencies. Future research also needs to differentiate sending and receiving households stronger according to personal features in order todeepen our understanding about the choices of and restrictions of vulnerable groups who would benefit the most from using mobile cash systems. |
| Keywords: | Remittances,Financial Inclusion,Bitcoin,Alternative Money,Financial Technology,Africa,Mobile Cash |
| JEL: | F24 G23 G28 O16 O19 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:1362020&r=all |
| By: | Luc Arrondel (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris School of Economics) |
| Abstract: | This article looks back over the different dimensions of financial literacy: theoretical, methodological and empirical. First, the theoretical foundations of the notion of financial literacy are presented with reference to recent contributions by psychological or behavioural economics: "household finance" refers to the concept of financial literacy based on the empirical dead-ends of standard saver theory. This raises the question as to how to measure and evaluate it. Is the "standard" methodology, based on a few straightforward questions (interest calculations, notion of inflation and risk diversification), adequate or do other definitions need to be developed? As is often said, are the French really "useless at finance" ? Is their financial behaviour, in terms of their portfolio choices, affected by it ? And last but not least, how effective are economic education programmes and is a public financial literacy policy required? |
| Keywords: | Household finance,financial literacy,stock ownership |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02505320&r=all |
| By: | Joanna Tyrowicz (University of Regensburg, Germany; FAME|GRAPE; University of Warsaw, Poland; IZA; Rimini Centre for Economic Analysis); Krzysztof Makarski (FAME|GRAPE; Warsaw School of Economics, Poland); Artur Rutkowski (FAME|GRAPE) |
| Abstract: | Financing consumption of the elderly in the face of the projected increase in life expectancy is a key challenge for economic policy. Moreover, standard structural models with fully rational agents suggest that about 50-60 percent of old-age consumption is financed with voluntary savings, even in the presence of a fairly generous public pension system. This is clearly inconsistent with either the data, or the alarming simulations of old-age poverty in the years to come. Old-age saving (OAS) schemes are widely used policy instruments to address this challenge, but structural evaluations of such instruments remain rare. We develop a framework with incompletely rational agents: lacking financial literacy and experiencing commitment difficulties. We study a broad selection of OAS schemes and find that they raise welfare of financially illiterate agents and to a lesser extent improve welfare of agents with a high degree of time inconsistency. They also reduce the incidence of poverty at old age. Unfortunately, these instruments are fiscally costly, induce considerable crowd-out and direct fiscal transfers mostly to those agents, who need it the least. |
| Keywords: | old-age savings, incomplete rationality, welfare effects |
| JEL: | H31 H55 I38 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:20-06&r=all |
| By: | Chen,Rong - DECID; Divanbeigi,Raian |
| Abstract: | Despite the commitments of the development community toward broader access to finance, financial inclusion rates worldwide are rather unsatisfactory. To date, around two billion adults do not have access to basic financial services such as savings and checking accounts. Attempting to bridge such gap between policy objectives and outcomes, several economists have probed the determinants of financial inclusion. This paper contributes to the debate by investigating the role played by financial regulation. First, the paper proposes a broad index of regulatory quality for financial inclusion, emphasizing the role of nontraditional delivery models, for example, branchless banking, and actors, for example, nonbank lending institutions. Second, the paper tests the relationship between regulatory quality and financial inclusion outcomes. The analysis finds that in countries where regulatory quality is within the top quartile, individuals are 12.4 percent more likely to have an account at a financial institution with respect to bottom quartile countries. |
| Keywords: | Financial Structures,Financial Sector Policy,Microfinance,Rural Microfinance and SMEs,Banks&Banking Reform |
| Date: | 2019–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:8711&r=all |
| By: | Ahmad Ma'ruf (Department of Economics, Universitas Muhammadiyah Yogyakarta, Indonesia Author-2-Name: Febriyana Aryani Author-2-Workplace-Name: Institute of Public Policy and Economic Studies, Yogyakarta, 55293, Indonesia Author-3-Name: Author-3-Workplace-Name: 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 - Financial Inclusion is an essential agenda at the ASEAN level. Increasing financial inclusion aims to develop the economic capacity of the population to reduce poverty and encourage income distribution. This study aims to analyze the relationship of financial inclusion to the achievement of Sustainable Development Goals (SDGs) in the aspect of poverty alleviation in ASEAN.Methodology/Technique - This study uses a quantitative approach. The data used is secondary data in the period between 2010 and 2018. Data processing uses multiple regression. The financial inclusion dimensions analyzed are the socioeconomic dimension and the infrastructure dimension.Findings - Financial Inclusion has a negative and significant relationship with the achievement of sustainable development goals (SGDs) in the aspect of poverty alleviation in ASEAN.Novelty - The statement that the development of countries in ASEAN to realize SDGs on poverty eradication becomes very important. This study is essential for policymakers regarding poverty alleviation and financial inclusion development. This study contributes to the financial inclusion literature in ASEAN with an emphasis on the socioeconomic dimension. |
| Keywords: | Financial Inclusion; Sustainable Development Goals; Poverty; ASEAN. |
| JEL: | G00 G28 |
| Date: | 2019–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:gtr:gatrjs:jber180&r=all |
| By: | Seyha Khek; Phon Sophat (National Bank of Cambodia); Vety Meng |
| Abstract: | This study aims to determine how Information Technology (IT) impacts financial inclusion and strengthens the profit of commercial banks and MDIs in Cambodia using two-stage value chain DEA technique. The model also provides the efficiency score and approached factors within financial inclusion and profitability mechanism. The finding suggests that financial inclusion is backed up by strong significant technology while profitability is anchored at 76.5 percent of total banks' profits. Furthermore, through the usage of IT-based transactions at 32 percent, banks and financial institution could enhance 28 percent of profit, and 78 percent of ATMs has been used to promote the access and financial usage. From these results, improving institutional IT adoption could increase financial inclusion and achieves the profit efficiency. |
| Keywords: | Financial inclusion,Profitability,Technology,two-stage Value Chain DEA |
| Date: | 2020–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02496410&r=all |
| By: | Armand Fouejieu; Anta Ndoye; Tetyana Sydorenko |
| Abstract: | Countries in the MENAP and CCA regions have the lowest levels of financial inclusion of small and medium enterprises (SMEs) in the world. The paper provides empirical evidence on the drivers of SME access to finance for a large sample of countries, and identifies key policy priorities for these two regions: economic and institutional stability, competition, public sector size and government effectiveness, credit information infrastructure (e.g., credit registries), the business environment (e.g., legal frameworks for contract enforcement), and financial supervisory and regulatory capacity. The analysis also shows that improving credit information, economic competition, the business environment along with economic development and better governance would help close the SME financial inclusion gap between MENAP and CCA regions and the best performers. The paper concludes on the need to adopt holistic policy strategies that take into account the full range of macro and institutional requirements and reforms, and prioritize these reforms in accordance with each country’s specific characteristics. |
| Date: | 2020–03–13 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:20/55&r=all |