nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2022‒08‒08
three papers chosen by

  1. Digital Technologies and Financial Inclusion in Sub-Saharan Africa By Jean-Claude Kouladoum; Muhamadu Awal Kindzeka Wirajing; Tii N. Nchofoung
  2. Chinese-backed FinTech Lending Boom: How did Indonesia Respond? By Angela Tritto; Yujia He; Victoria Amanda Junaedi
  3. The role of mobile characteristics on mobile money innovations By Asongu, Simplice A; Odhiambo, Nicholas M

  1. By: Jean-Claude Kouladoum (University of Moundou, Chad); Muhamadu Awal Kindzeka Wirajing (University of Dschang, Cameroon); Tii N. Nchofoung (University of Dschang, Cameroon)
    Abstract: The study investigates the digital technology-financial inclusion nexus in 43 Sub-Saharan African countries between 2004 and 2019. The methodologies are the Generalized Method of Moment (GMM) to take care of double causality and country heterogeneity and IV-Tobit to take into account the limited range in the dependent variables. At all levels, digital technology measured by ICT indicators of the subscription rate of fixed and mobile telephone users, fixed broadband, internet users and a composite indicator of digitalization have positive significant effects on financial inclusion. A further robustness check is conducted by computing a composite indicator of financial inclusion to determine how it is affected by digital technology. The findings indicate that the rate of financial inclusion in Sub Saharan Africa rises with increasing digital technologies. There should be more investments in terms of promoting financial and technological infrastructures and also in the human capital sector since financial literacy can play an important part in promoting financial stability and inclusive finance in Africa.
    Keywords: Digital Technologies; Financial inclusion; Sub Saharan Africa
    Date: 2022–01
  2. By: Angela Tritto (Adjunct Assistant Professor at the Division of Public Policy; Institute for Emerging Market Studies, Division of Social Science, Hong Kong University of Science and Technology); Yujia He (Assistant Professor; Patterson School of Diplomacy and International Commerce, University of Kentucky); Victoria Amanda Junaedi (Research Assistant; Institute for Emerging Market Studies, Hong Kong University of Science and Technology)
    Abstract: Peer-to-peer (P2P) online lending has the potential to boost innovation and financial inclusion in emerging markets, yet it can also incur investment and borrower-related risks, such as privacy breaches. Driven by regulation control in China, Chinese investments flocked to Indonesia, causing a rapid expansion of online lending platforms. Similar to what happened in China prior to the regulatory crackdown, the P2P lending boom in Indonesia saw a rise in unethical and illegal business practices. The government responded by creating new regulations and institutions to mitigate risks without stifling the potential for financial inclusion. A proactive approach towards monitoring and regulating emerging high-tech industries should be sought by strengthening links with industry and civil society, and through international cooperation for policy and knowledge sharing.
    Date: 2022–07
  3. By: Asongu, Simplice A; Odhiambo, Nicholas M
    Abstract: This study focuses on linkages between bank accounts and supply-side mobile money drivers for mobile money innovations. It seeks to understand how bank accounts can be complemented with mobile subscription and mobile connectivity dynamics (i.e., mobile connectivity coverage and mobile connectivity performance) for mobile money innovations. The empirical evidence is based on quadratic Tobit regressions. First, there are positive net relationships from the roles of mobile subscriptions and mobile connectivity coverage in modulating bank accounts for mobile money innovations. Second, mobile connectivity performance does not significantly modulate bank accounts for mobile money innovations. Third, given the negative marginal relationships associated with the positive net relationships, thresholds for complementary policies in mobile money supply factors that are worthwhile for bank accounts to stimulate mobile money innovations are provided. The thresholds are: (i) mobile subscription rates of 87.50%, 80.50%, and 98.50% of the adult population for respectively, the mobile money accounts, the mobile used to send money, and the mobile used to receive money, and (ii) mobile connectivity coverages of 64.00%, 69.33%, and 78.00% for respectively, the mobile money accounts, the mobile used to send money, and the mobile used to receive money.
    Keywords: Mobile money; technology diffusion; financial inclusion; inclusive innovation
    Date: 2022–01

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