nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2020‒07‒27
five papers chosen by

  1. The Promise of Fintech; Financial Inclusion in the Post COVID-19 Era By Ratna Sahay; Ulric Eriksson von Allmen; Amina Lahreche; Purva Khera; Sumiko Ogawa; Majid Bazarbash; Kimberly Beaton
  2. The complementarity between cash transfers and financial literacy for child growth By Dieter von Fintel; Marisa von Fintel; Thabani Buthelezi
  3. Do Remittances Enhance Financial Inclusion in LMICs and in Fragile States? By Sami Ben Naceur; Ralph Chami; Mohamed Trabelsi
  4. Unlocking Access to Finance for SMEs: A Cross-Country Analysis By Armand Fouejieu; Anta Ndoye; Tetyana Sydorenko
  5. On the diffusion of mobile phone innovations for financial inclusion By Simplice A. Asongu; Nicholas Biekpe; Danny Cassimon

  1. By: Ratna Sahay; Ulric Eriksson von Allmen; Amina Lahreche; Purva Khera; Sumiko Ogawa; Majid Bazarbash; Kimberly Beaton
    Abstract: Technology is changing the landscape of the financial sector, increasing access to financial services in profound ways. These changes have been in motion for several years, affecting nearly all countries in the world. During the COVID-19 pandemic, technology has created new opportunities for digital financial services to accelerate and enhance financial inclusion, amid social distancing and containment measures. At the same time, the risks emerging prior to COVID-19, as digital financial services developed, are becoming even more relevant.
    Keywords: Financial inclusion;Technological innovation;Financial services;Financial services industry;Contagious diseases;Financial crises;Financial institutions;Macroprudential policies and financial stability;COVID-19,Pandemic,Fintech,,DPPP,DP,digital infrastructure,traditional financial institution,financial literacy,gender gap,digital literacy
    Date: 2020–07–01
  2. By: Dieter von Fintel (Department of Economics, Stellenbosch University, South Africa. Research Affiliate: Institute of Labor Economics (IZA), Bonn); Marisa von Fintel (Department of Economics, Stellenbosch University, South Africa.); Thabani Buthelezi (Department of Social Development, Government of South Africa)
    Abstract: A large body of international research focuses on the corrective influence that cash transfers can have on the health of chronically malnourished children. However, the evidence also points to the heterogeneity of the impact of these cash grants within the recipient population. Identifying pre-existing household conditions that are correlated with grant efficacy can have important policy consequences. In this paper, we examine one such a condition, namely the financial literacy of the caregiver of the child. We make use of the fourth and fifth waves of the South African National Income Dynamics Study (NIDS) data. We estimate the relationship between height and growth in a sample of children aged 0 to 7 years and the child support grant. We find that eligible children who have financially literate caregivers receiving the cash transfer on their behalf have higher growth trajectories over time, compared to children with financially illiterate caregivers. We however find no such effect for child height. Our results do not preclude a pure income effect for cash transfers: children who become CSG beneficiaries gain in height immediately, even without financially literate caregivers. Arguably, the combination of cash transfers and financial literacy have long-run benefits for children over and above an income effect. Although we are unable to identify the specific mechanisms through which financial literacy may impact child growth, we discuss some potential channels. The results have important policy implications regarding potential ways in which to improve the efficacy of the child support grant in South Africa.
    Date: 2019
  3. By: Sami Ben Naceur; Ralph Chami; Mohamed Trabelsi
    Abstract: This paper explores the relationship between remittances and financial inclusion for a sample of 187 countries over the period 2004-2015, using cross-country as well as dynamic panel GMM regressions. At low levels of remittances-to-GDP, these flows act as a substitute to formal financial channels, thereby reducing financial inclusion. In contrast, when remittance-to-GDP ratio is high, above 13% on average, they tend to complement formal access and usage channels, thus enhancing financial inclusion. This “U shaped” relationship highlights the role of remittance flows in financing household consumption at low levels, while raising formal household bank savings and allowing for more intermediation, at high levels of remittance-to-GDP.
    Date: 2020–05–22
  4. 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.
    Keywords: Financial crises;Financial services;Macroprudential policies and financial stability;Bank credit;Financial systems;Small and Medium Sized Enterprises,Financial Inclusion,WP,SME,SMEs,CCA,risky borrower,informality
    Date: 2020–03–13
  5. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas Biekpe (Cape Town, South Africa); Danny Cassimon (University of Antwerp, Belgium)
    Abstract: “Replications are an important part of the research process because they allow for greater confidence in the findings” (McEwan, Carpenter & Westerman, 2018, p. 235). This study extends Lashitew, van Tulder and Liasse (2019, RP) by addressing the concern of multicollinearity that affects the signs and significance of estimated coefficients. This article investigates nexuses between innovations in mobile money and financial inclusion in developing countries. Demand and supply factors that affect the diffusion of mobile services as well as macro-level institutional and economic factors are taken on board. The empirical evidence is based on Tobit regressions. The study finds that when the empirical analysis is robust to multicollinearity, two main tendencies are apparent: the significant findings of Lashitew et al. (2019) are confirmed and many new significant estimated coefficients emerge. While this study confirms the findings of the underlying research, it also goes further to improve the harmony in narratives between the predictors and the outcome variables. Accordingly, by accounting for multicollinearity, the earlier findings are now more consistent across the set of predictors (i.e. demand and supply factors) and the attendant financial inclusion outcomes (i.e. mobile money accounts, mobile used to send money and mobile used to receive money).
    Keywords: Mobile money; technology diffusion; financial inclusion; inclusive innovation
    JEL: D10 D14 D31 D60 O30
    Date: 2020–03

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