nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2020‒09‒07
eight papers chosen by

  1. Theories of financial inclusion By Ozili, Peterson K
  2. Financial inclusion research around the world: a review By Ozili, Peterson K
  3. Information, Price, and Barriers to Adoption and Usage of Mobile Money Evidence from a Field Experiment in The Gambia By Guillermo Cruces Author-Name: Hamidou Jawara Author-Name: Adama Touray Author-Name: Fatoumata Singhateh
  4. Social inclusion and financial inclusion: international evidence By Ozili, Peterson K
  5. Is Bank Loan Funding to SMEs in North Africa a Matter of Size? By Philippe Adair; Imène Berguiga
  6. Local ambassadors promote mobile banking in Northern Peru By Marcos Agurto; Habiba Djebbari; Sudipta Sarangi Author-Name: Brenda Silupú Author-Name: Carolina Trivelli Author-Name: Javier Torres
  7. Burkina Faso; Selected Issues By International Monetary Fund
  8. Inequality and Gender Inclusion: Minimum ICT Policy Thresholds for Promoting Female Employment in Sub-Saharan Africa By Asongu, Simplice; Odhiambo, Nicholas

  1. By: Ozili, Peterson K
    Abstract: This article presents several theories of financial inclusion. Financial inclusion is the ease of access to, and the availability of, basic financial services to all members of the population. Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs in a responsible and sustainable way. Financial inclusion practices vary from country to country, and there is need to identify the underlying principles or propositions that can explain the observed variation in financial inclusion practices. These set of principles or propositions are called theories. Financial inclusion theories are explanations for observed financial inclusion practices. The study shows that the ideas and perspectives on financial inclusion can be grouped into theories to facilitate meaningful discussions in the literature. The theories are intended to be useful to researchers, academics and practitioners. The resulting contributions to theory development are useful to the problem-solving process in the global financial inclusion agenda.
    Keywords: financial inclusion, theory, financial access, access to finance, dissatisfaction theory, vulnerable group, systems theory, community echelon, public service, special agent, financial literacy, collaborative intervention, intervention fund, households.
    JEL: O1 O12 O17 R2
    Date: 2020
  2. By: Ozili, Peterson K
    Abstract: This paper provides a comprehensive review of the recent evidence on financial inclusion from all regions of the World. It identifies the emerging themes in the financial inclusion literature as well as some controversy in policy circles regarding financial inclusion. In particular, I draw attention to some issues such as optimal financial inclusion, extreme financial inclusion, how financial inclusion can transmit systemic risk to the formal financial sector, and whether financial inclusion and exclusion are pro-cyclical with changes in the economic cycle. The key findings in this review indicate that financial inclusion affects, and is influenced by, the level of financial innovation, poverty levels, the stability of the financial sector, the state of the economy, financial literacy, and regulatory frameworks which differ across countries. Finally, the issues discussed in this paper opens up several avenues for future research
    Keywords: financial inclusion, financial technology, digital finance, poverty reduction, financial stability, financial institutions, economic cycle, systemic risk, controversy, Fintech.
    JEL: O12 O16 O17 O19 R2
    Date: 2020
  3. By: Guillermo Cruces Author-Name: Hamidou Jawara Author-Name: Adama Touray Author-Name: Fatoumata Singhateh
    Abstract: Mobile money has been heralded as a way to foster financial inclusion. While it has become popular in developing countries, most notably in African nations, there are still strong barriers to its adoption and usage. The purpose of this study is to examine the extent to which a lack of information and high prices are limiting factors in the adoption of mobile money. We implemented a simple randomized controlled trial among a group of difficult-to- access potential users: mobile phone users in The Gambia who had opened mobile money wallets but had not made a transaction. We offered meaningful price discounts on withdrawal charges, and made these discounts salient by reminding users about them every month for a period of six months. Our analysis measures different dimensions of mobile money use by drawing from administrative mobile phone company records. We also carried out a post- treatment survey to gauge knowledge about, and attitudes towards, mobile money. Our results indicate that treated individuals were substantially more aware than controls about the uses of mobile wallets and about the meaningful discounts of 15% and 30% offered. However, only a small fraction of treated individuals started using mobile wallets, and the difference was not statistically significant. Perceptions of safety, trust in the platform, and service reliability were not significantly different between treated and controls. However, treated individuals were more likely to perceive the service charges to be expensive. We interpret this as evidence that our population of interest was uninformed about the platform at large. While our treatment increased awareness about its capabilities and operation, potentially fostering its adoption, it also increased awareness of the relatively high fees it involves, which in turn limited usage. Both a lack of information and high prices need to be addressed to foster the adoption and usage of mobile money in developing countries.
    Keywords: Mobile wallet, barriers to adoption and usage, developing countries, Gambia
    JEL: D13 G21 O16 P34
    Date: 2020
  4. By: Ozili, Peterson K
    Abstract: This paper investigates the association between social inclusion and financial inclusion. Social inclusion and financial inclusion are two major development policy agenda in many countries, and the association between them has received little attention in the policy and academic literature. Using correlation analysis, the findings reveal a positive and significant correlation between social inclusion and financial inclusion for Asian countries, Middle Eastern countries and African countries while the correlation between social inclusion and financial inclusion is negative for European countries. The findings also show that European and Asian economies experience higher levels of social inclusion and account ownership in a formal financial institution while African countries and Middle Eastern countries experience lower levels of social inclusion and account ownership. The implication of the findings is that some socially inclusive societies tend to enjoy greater financial inclusion while other socially inclusive societies may experience lower financial inclusion. The study provides insights for researchers, decision makers, and practitioners to understand the association between financial and social inclusion.
    Keywords: financial inclusion, social inclusion, sustainability, access to finance, account ownership
    JEL: O1 O2
    Date: 2020
  5. By: Philippe Adair (University Paris-Est Créteil-UPEC; ERUDITE Research Team); Imène Berguiga (IHEC-University of Sousse; ERUDITE Research Team)
    Abstract: The paper tackles the bank loan issue according to the size of 3,896 businesses, a sample from the World Bank Enterprises Survey conducted as of 2013 in Egypt, Morocco and Tunisia. First, the sample is adjusted with respect to international standards. Second, businesses that did not apply vs. those that did apply for a loan are investigated as regards corporate finance theory. Third, a logistic model addresses the demand and the supply of 1,020 businesses that applied for a loan. Characteristics of businesses -Size, Age, Registration and Financial inclusion influence loan demand, whereas Financial inclusion and Collateral influence loan supply.
    Keywords: Bank loans; Corporate finance; Logistic regressions; North Africa; SMEs
    JEL: G21 G32
  6. By: Marcos Agurto; Habiba Djebbari; Sudipta Sarangi Author-Name: Brenda Silupú Author-Name: Carolina Trivelli Author-Name: Javier Torres
    Abstract: We experiment with a novel way to boost information acquisition that exploits existing social ties between the promoter of a new financial technology and community members. We offer information and training workshops on a new mobile-money platform in peri-urban and rural areas in Peru. In the treatment group, workshops are led by promoters who are personally known to the invited participants. In the control group, comparable individuals are invited to attend similar workshops, but the workshops are led by agents external to the community. Our findings suggest that lack of information impedes product adoption, which is itself limited by lack of trust in the individual who provides the information.
    Keywords: Financial inclusion, social networks, information transmission, trust
    JEL: D91 G23 I22 I31 O33
    Date: 2020
  7. By: International Monetary Fund
    Abstract: This Selected Issues paper examines Burkina Faso’s banking system and traces its macro-financial linkages. The analysis builds upon the macro-financial linkages work conducted in the context of the Article IV consultation with the West African Economic and Monetary Union (WAEMU). Overall, the banking system remains profitable and well-capitalized, but its ability to support the real economy needs to be improved if the authorities are to reach their development goals. Moreover, financial inclusion remains low, and despite recent progress on basic access to the financial system, significant barriers to accessing credit remain; particularly for women, rural inhabitants, and the agricultural sector. The available data indicates that the banking system remains well-capitalized and profitable. Systemic risks remain broadly contained, and new banks have come into operation, but there is significant scope to improve the banking system’s ability to support the real economy and financial inclusion. Deteriorating security conditions could undermine banks’ ability to expand into underserved remote areas.
    Keywords: Banking sector;Revenue mobilization;Tax revenues;Tax policy;Tax administration;Selected issues;Tax revenue;Revenue administration;Economic growth;Revenue measures;WAEMU,custom administration,vat,total tax revenue,bank system
    Date: 2019–01–22
  8. By: Asongu, Simplice; Odhiambo, Nicholas
    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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