nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2022‒01‒24
three papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Does economic policy uncertainty reduce financial inclusion? By Ozili, Peterson K
  2. Is Digital Credit Filling a Hole or Digging a Hole? Evidence from Malawi By Valentina Brailovskaya; Pascaline Dupas; Jonathan Robinson
  3. The role of inclusive education in governance for inclusive economic participation: gender evidence from sub-Saharan Africa By Simplice A. Asongu; Nicholas M. Odhiambo

  1. By: Ozili, Peterson K
    Abstract: This paper examines whether economic policy uncertainty (EPU) reduces the level of financial inclusion. I predict that high EPU should have a negative effect on the level of financial inclusion. I argue that high EPU will discourage financial institutions from providing basic financial services to low end customers and unbanked adults, and this will lead to a decrease in the level of financial inclusion. Using a sample of 22 countries, I find that EPU does not have a significant impact on financial inclusion. None of the nine indicators of financial inclusion have a significant direct relationship with EPU. Also, I find some evidence that the combined effect of high EPU and high nonperforming loans reduces financial inclusion, particularly through bank branch contraction and a reduction in the use of electronic payments. Meanwhile, the use of formal accounts and credit cards increases in times of high credit supply and high EPU.
    Keywords: Financial inclusion, policy uncertainty, economic policy uncertainty, business cycle, non-performing loan, cost efficiency, cost to income ratio, access to finance, formal account, credit cards, debit cards, mobile payments, electronic payment, borrowings, savings bank branch, unbanked adults.
    JEL: E50 E52 E59 G21 I31
    Date: 2022
  2. By: Valentina Brailovskaya; Pascaline Dupas; Jonathan Robinson
    Abstract: Digital credit has expanded rapidly in Africa, mostly in the form of short-term, high-interest loans offered via mobile money. Loan terms are often opaque and consumer financial literacy is low, providing opportunities for predatory lending. A regression discontinuity analysis shows no negative effect of access to digital loans on financial well-being, but the majority of borrowers fail to repay on time and incur high late fees. We randomize exposure to a short phone-based financial literacy intervention. The intervention improved knowledge and marginally improved loan repayment but increased loan demand, increasing overall default risk.
    JEL: D14 O12 O16
    Date: 2021–12
  3. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: This study investigates the relevance of inclusive education in moderating the effect of good governance on female economic inclusion in sub-Saharan Africa. First, inclusive tertiary education modulates: (i) government effectiveness to induce a positive net effect on female labour force participation; (ii) political stability and corruption-control to induce negative net effects on female unemployment; (iii) government effectiveness for a positive net effect on female unemployment and (iv) regulation quality and the rule of law for positive net impacts on female employment. Second, inclusive secondary education moderates: (i) corruption-control for a positive net effect on female labour force participation; (ii) “voice and accountability†, government effectiveness and corruption-control for negative net impacts on female unemployment; (iii) the rule of law for a positive net effect on female unemployment; (iv) “voice and accountability†, government effectiveness and corruption-control for positive net effects on female employment. Policy implications are discussed. Inclusive education thresholds for complementary policy policies are also computed and discussed. At these thresholds, inclusive education becomes a necessary but not a sufficient condition to complement governance in order to promote female economic inclusion.
    Keywords: Africa; Gender; Inclusive development
    JEL: G20 I10 I32 O40 O55
    Date: 2021–01

This nep-fle issue is ©2022 by Viviana Di Giovinazzo. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.