nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2020‒04‒27
six papers chosen by

  1. Towards Financial Inclusion: An Assessment for Suriname By Fraser, Nancy; MacDonald, Cherique; Ooft, Gavin
  2. Financial Literacy, Economic Preferences, and Adolescents' Field Behavior By Michael Razen; Jürgen Huber; Laura Hueber; Michael Kirchler; Matthias Stefan
  3. Remittances, Financial Inclusion and Income Inequality in Africa By BKWAYEP, NGUEMNANG Yannick Rodrigue
  4. Can Boosting Savings and Skills Support Female Business Owners in Indonesia? Evidence from A Randomized Controlled Trial By Mayra Buvinic; Hillary C. Johnson; Elizaveta Perova; Firman Witoelar
  5. A Decision Tree for Digital Financial Inclusion Policymaking By Stijn Claessens; Liliana Rojas-Suarez
  6. Inequality and gender economic inclusion: the moderating role of financial access in Sub-Saharan Africa By Simplice A. Asongu; Joseph Nnanna; Paul N. Acha-Anyi

  1. By: Fraser, Nancy; MacDonald, Cherique; Ooft, Gavin
    Abstract: This paper presents an assessment of financial inclusion in Suriname, mainly from the Central Bank’s perspective. It examines existing data on financial inclusion and policy initiatives and measures the Central Bank of Suriname has taken to stimulate financial inclusion. This research is mainly conducted through desk studies and is supported by interviews with various stakeholders involved with financial inclusion and education as well as with the relevant Central Bank departments in charge of national financial inclusion initiatives. Consequently, the study presents policy recommendations aimed at improving financial inclusion in Suriname, since it is an important contributor to monetary policy and a prerequisite for financial stability.
    Keywords: Financial Inclusion,Financial Services,Financial Literacy,Monetary Policy
    JEL: G29 O16 E44
    Date: 2019
  2. By: Michael Razen; Jürgen Huber; Laura Hueber; Michael Kirchler; Matthias Stefan
    Abstract: Financial literacy and economic preferences are considered to be important drivers of health, income, and general well-being. In this paper we bridge the gap between studies on financial literacy and research on economic preferences by how they interplay with each other and the field behavior of adolescents. First, we report that financial literacy scores are positively associated with patience, male gender, and educational level of the father. Second, we observe that risky field behavior like smoking and gambling is positively associated with various measures of risk-tolerance, and negatively associated with patience. Finally, we discuss implications for financial education programs.
    Keywords: Experimental finance, financial literacy, time preferences, risk preferences, adolescents
    JEL: C93 D91 D81 J13
    Date: 2020–05
  3. By: BKWAYEP, NGUEMNANG Yannick Rodrigue
    Abstract: This paper extends the existing literature on financial inclusion by analyzing the role of financial inclusion (FI) within remittances on income inequality (Gini, Atkinson and Palma-Ratio). It examines whether FI amplifies the reduction in income inequality in a panel of 47 countries over the period 2004-2014. The empirical evidence is based on Generalised Method Moments. We used Five financial inclusion indicators (ATMs for 100,000 adults; banking branches for 100,000 adults; credits: deposits and insurance), remittances and three income inequality variables (Gini index; Atkinson and Palma ratio) as part of this study. The results show that migrant remittances and FI reduce income inequality. The results further indicate that FI implifies the impact of the migrant remittances on income inequality, revealing a complementarity between remittances and FI to reduce income inequality. The complementary action of financial inclusion on migrants' remittances offers wider access to financial services which also leads to an increase in remittances and therefore reduces inequalities.
    Keywords: Inequality, Remittances, Financial Inclusion, Africa
    JEL: G21 G24 O11 O19
    Date: 2020–04–16
  4. By: Mayra Buvinic (Center for Global Development); Hillary C. Johnson (World Bank); Elizaveta Perova (World Bank); Firman Witoelar (Australian National University)
    Abstract: There is broad evidence of gender gaps in the productivity of microenterprises, which are in part linked to financial and human capital constraints. Existing literature suggests that interventions simultaneously addressing skills and capital constraints can be effective, but there is little evidence to date exploring the combination of skills and savings interventions. This study tests the relative effectiveness and cost effectiveness of providing supply-side incentives to promote agent banking savings accounts, business and financial literacy training for female entrepreneurs, and the combination of the two on women’s businesses and agency in Indonesia. The study took place in 401 villages in East Java in which agent banking products were recently introduced. Although the trial found only small positive effects on the take-up of branchless banking services, both interventions had significant positive impacts on women’s profits. The impacts of the training and mentoring intervention seem to come in part from improved business practices, greater savings, increased business assets, and increased decision-making power. Because the high incentives treatment impacted women’s profits but not any intermediate outcomes the mechanisms are less clear—potentially coming either from a more woman-friendly business environment or through using their husbands’ savings or their existing savings to support their businesses. Although the high agent incentives are more cost-effective than the training and mentoring, policy makers may still prefer the demand-side intervention, as it has more positive implications for women’s overall empowerment and stronger impacts for the poorest quintile of female entrepreneurs.
    JEL: D14 M2 O16
    Date: 2020–04–10
  5. By: Stijn Claessens (Bank for International Settlements); Liliana Rojas-Suarez (Center for Global Development)
    Abstract: In recent years, a large number of countries have implemented policy changes to advance financial inclusion, especially by using digital financial services (DFS). However, results are mixed. While some countries are achieving impressive inclusion gains, others continue to fall short of expectations. How to properly diagnose the country-specific root causes of this shortfall and prioritize needed actions is a pressing question for policymakers in charge of designing and implementing financial inclusion strategies. Building on the Growth Diagnostic work by Hausmann and others, this paper provides an analytical framework (a decision tree) to identify country-specific constraints blocking progress with financial inclusion; that is, binding constraints. Using a deductive top down approach and dividing constraints between supply and demand factors, the tree analyzes various potential causes (branches in the tree). To identify the most relevant constraints, the methodology calls for analysis of the markets for financial services (particularly DFS) using observed (or shadow) prices and quantities. For its benchmarking approach, it proposes a wide-ranging set of indicators, including aggregate and micro-level statistics as well as survey data to reflect providers’ and consumers’ perceptions. For ease of exposition and illustrative purposes, the discussion of the tree uses many country examples. Recognizing constraints differ by financial service, trees are presented for payments and transfers, store of value, and credit services.
    Keywords: Financial inclusion, digital financial inclusion, financial regulation, financial system, decision tree, policy making
    JEL: D18 D53 G20 G28 O57 O16
    Date: 2020–02–27
  6. By: Simplice A. Asongu (Yaounde, Cameroon); Joseph Nnanna (The Development Bank of Nigeria, Abuja, Nigeria); Paul N. Acha-Anyi (Walter Sisulu University, South Africa)
    Abstract: This study assesses how financial access can be used to modulate the effect of income inequality on gender economic inclusion. The focus is on 42 countries in sub-Saharan Africa (SSA) for the period 2004-2014 and the empirical evidence is based on Generalised Method of Moments (GMM) and Fixed Effects (FE) regressions. Significant results are not apparent in the FE regressions. The following main findings are established from the GMM estimations. There is a negative net effect from the role of financial access in modulating the effect of the Palma ratio on female labour force participation while there is a positive net effect from the relevance of financial access in moderating the effect of the Gini coefficient on female unemployment. There are also net negative effects from the role of financial access in modulating the Gini coefficient and the Palma ratio for female employment. The unexpected findings are elucidated and implications are discussed in the light of challenges to Sustainable Development Goals in the sub-region. Inter alia: financial access is a necessary but not a sufficient moderator of income inequality for the enhancement of women’s participation in the formal economic sector.
    Keywords: Africa; Finance; Gender; Inclusive development
    JEL: G20 I10 I32 O40 O55
    Date: 2019–01

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