nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2020‒08‒17
three papers chosen by

  1. All about the state-Fifty years of innovative technology to deliver an inclusive financial sector By Rouse, Marybeth; Batiz-Lazo, Bernardo; Carbo Valverde, Santiago
  2. Attributes needed for Japan's central bank digital currency By Hiroshi FUJIKI
  3. Inequality and gender economic inclusion: the moderating role of financial access in Sub-Saharan Africa By Asongu, Simplice; Nnanna, Joseph; Acha-Anyi, Paul

  1. By: Rouse, Marybeth; Batiz-Lazo, Bernardo; Carbo Valverde, Santiago
    Abstract: This paper documents the long-term nature of technological innovations which have transformed retail finance and addressed financial exclusion. The paper also contributes to the body of literature on the state as an entrepreneur. The roots of financial inclusion are traced back to the 1960s with a discussion of the role played by the state, in contrast to that of the private sector and disruptive innovation. The case of the world-recognised mobile payment service M-Pesa, which has been credited with transforming access to financial services in Africa, is then examined. The empirical results suggest that the state was actively involved in the development and deployment of applications of information and communication technologies which led to M-Pesa. This study provides support for policies that promote mobile banking technology as a means of enhancing financial inclusion. The study also confirms that public-private partnerships, together with an enabling regulatory environment, facilitate technological innovation.
    Keywords: Disruptive technology; financial inclusion; innovation; state as an entrepreneur; Kenya
    JEL: G20 H70 O31
    Date: 2020–07–20
  2. By: Hiroshi FUJIKI
    Abstract: The issuance of central bank digital currency became a real policy issue after the announcement of Facebook's Libra. Which types of product attributes should a central bank digital currency have to be widely accepted? We answer this question by analyzing the consumers' acceptance of hypothetical payment instruments. We used Japanese data from the 2019 Financial Literacy Survey to estimate a model of consumers' ranking of the frequency of the use of five payment instruments. The estimates of the model showed that the respondents to the survey value payment instruments with shorter transaction times and mobile payment instruments. Based on the estimates of the model, we conducted counterfactual simulations for the introduction of the hypothetical mobile version of noncash payment methods that required a shorter transaction time. We found that these hypothetical products would be the most frequently used payment methods on average; however, respondents with old, low-income, and low-financial asset holdings, who were likely to be heavy cash users, would use them less frequently. The results suggest that if the Bank of Japan wanted to issue a central bank digital currency that would be used almost every day as a replacement for cash, policy tools should be utilized to encourage the use of it by these groups as well.
    Date: 2020–07
  3. By: Asongu, Simplice; Nnanna, Joseph; Acha-Anyi, Paul
    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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