nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2023‒03‒20
nine papers chosen by

  1. A Survey on Financial Inclusion: Theoretical and Empirical Literature Review By Shah, Shahid Manzoor; Ali, Amjad
  2. Who loses in financial inclusion? By Ozili, Peterson K
  3. Determinants of interest in eNaira and financial inclusion information in Nigeria: role of Fintech, cryptocurrency and central bank digital currency By Ozili, Peterson K
  4. Financial Inclusion Expectation Gap By Ozili, Peterson K
  5. Impact of financial inclusion on economic growth in secular and religious countries By Ozili, Peterson K; Lay, Sok Heng; Syed, Aamir
  6. The Production of Financial Literacy By Giovanni Gallipoli; Sebastian Gomez-Cardona
  7. Gender-inclusive financial and demographic literacy: lessons from the empirical evidence By Giovanna Apicella; Enrico G. De Giorgi; Emilia Di Lorenzo; Marilena Sibillo
  8. Information technology, inequality and adult literacy in developing countries By Simplice A. Asongu; Nicholas M. Odhiambo; Mushfiqur Rahman
  9. Credibility gains from communicating with the public: evidence from the ECB’s new monetary policy strategy By Ehrmann, Michael; Georgarakos, Dimitris; Kenny, Geoff

  1. By: Shah, Shahid Manzoor; Ali, Amjad
    Abstract: Recently, policymakers and researchers have shifted their attention toward financial inclusion to control poverty, the black economy, tax collection, and financial development. Empirical and Theoretical literature shows that financial inclusion has become a fundamental requirement for economic development. This study provides a detailed literature review covering recent development in financial inclusion among different nations as well as in different reigns. This study highlights the major factors which influence financial inclusion i.e., financial literacy, financial innovations, financial regulation, financial stability, income, information communication technology, gender differences, cost of financial services, economic conditions, and political situations. These indicators are different across countries which becomes the major reason for variations in financial inclusion among countries. This study also highlights some demand-side and supply-side factors of financial inclusion. This study suggests that availability, accessibility, and usage are the major dimensions of financial inclusion which are measured by saving, lending, no of ATMs, no of bank branches, and no. of bank accounts. The study also has several dimensions of financial inclusion for future research.
    Keywords: financial inclusion, financial technology, financial stability, financial institutions
    JEL: G10 G20
    Date: 2022
  2. By: Ozili, Peterson K
    Abstract: Financial inclusion involves the provision of basic formal financial services to members of society. Policy efforts and collaboration with the private sector have helped to increase the level of financial inclusion in many countries. Such efforts give rise to net winners and net losers from financial inclusion efforts. This paper identifies the net losers from financial inclusion efforts. The lesson we learn from the net losers identified in this study is that being ‘banked’ is only a necessary condition to enjoy the benefits of financial inclusion. Being ‘banked’ is not a sufficient condition to enjoy the benefits of financial inclusion. We learn that a banked adult can be a net loser from financial inclusion despite being banked. This has wider implications for understanding the challenges to sustained financial inclusion.
    Keywords: financial inclusion, banked adults, losers, access to finance.
    JEL: G21 I31 I38
    Date: 2023–01–01
  3. By: Ozili, Peterson K
    Abstract: The eNaira is the central bank digital currency of Nigeria. People who are interested in the eNaira and financial inclusion will seek information about eNaira and financial inclusion. Their interest in information about eNaira and financial inclusion will make it easier for them to adopt the eNaira and embrace other financial inclusion innovations such as financial technology (Fintech) and cryptocurrency. This paper investigates the determinants of interest in eNaira and financial inclusion information. Interest over time data were analyzed using descriptive statistics, correlation analysis and ordinary least squares (OLS) regression. The study also used the GMM and 2SLS regression methods for robustness. The findings of this study reveal that interest in Fintech and eNaira information are significant positive determinants of interest in financial inclusion information. Also, interest in financial inclusion is a significant positive determinant of interest in eNaira information. Furthermore, interest in Fintech information has a positive and significant correlation with interest in financial inclusion information. There is also a significant positive correlation between interest in central bank digital currency information and interest in Fintech information. The implication of the findings is that interest in information about new financial innovations, such as Fintech and eNaira, can stimulate interest in information about financial inclusion.
    Keywords: eNaira, Fintech, financial inclusion, central bank digital currency, cryptocurrency, information, innovation, innovation diffusion theory.
    JEL: E50 E51 E52 E58 E59
    Date: 2023–01–04
  4. By: Ozili, Peterson K
    Abstract: The objective of this article is to define the financial inclusion expectation gap, offer some insight into the nature and the causes of it, and suggest ways to reduce the gap. The discussion in the article provides helpful insights into this problem towards achieving the United Nations Sustainable Development Goals. It is hoped that such an attempt can provide insights to understand the expectation gap in financial inclusion.
    Keywords: Access to finance, banked adults, development, expectation gap, financial inclusion, financial institutions, formal financial services, unbanked adults.
    JEL: G20 G21
    Date: 2023
  5. By: Ozili, Peterson K; Lay, Sok Heng; Syed, Aamir
    Abstract: Empirical research on the relationship between financial inclusion and economic growth has neglected the influence of religion or secularism. We investigate the effect of financial inclusion on economic growth in religious and secular countries. The financial inclusion indicators are the number of ATMs per 100, 000 adults and the number of bank branches per 100, 000 adults. The findings reveal that bank branch contraction significantly increases economic growth in secular countries. Bank branch expansion combined with greater internet usage increases economic growth in secular countries while high ATM supply combined with greater internet usage decreases economic growth in secular countries. We also find that bank branch expansion, in the midst of a widening poverty gap, significantly increases economic growth in religious countries, implying that financial inclusion through bank branch expansion is effective in promoting economic growth in poor religious countries. It was also found that internet usage is a strong determinant of economic growth in secular countries.
    Keywords: financial inclusion, economic growth, ATMs per 100, 000 adults, bank branches per 100, 000 adults, poverty, internet usage, access of finance, religion, religious countries, secular countries.
    JEL: E32 E51 G21
    Date: 2023
  6. By: Giovanni Gallipoli (Vancouver School of Economics, UBC); Sebastian Gomez-Cardona (University of British Columbia)
    Abstract: We study the accumulation of financial competencies in a model of dynamic skill formation. We find evidence of complementarities between financial literacy and risk attitudes. Risk tolerance facilitates experimentation and learning-by-doing. Latent risk attitudes and financial literacy are unevenly distributed across households and do not align with general human capital. Linking estimates with data on household portfolios, we show that early-life differences in financial literacy may account for more than half of the standard deviation of wealth by age 60. Dynamic complementarities in skill formation imply that early interventions could reduce later-life inequality while boosting wealth growth.
    Keywords: financial literacy, inequality, wealth returns, skills, risk attitudes
    JEL: I24 D31 J24 D81
    Date: 2023–02
  7. By: Giovanna Apicella (University of Udine; University of St. Gallen); Enrico G. De Giorgi (University of St. Gallen - SEPS: Economics and Political Sciences; Swiss Finance Institute); Emilia Di Lorenzo (CSEF - University of Naples Federico II - Faculty of Economics); Marilena Sibillo (Università degli Studi di Salerno)
    Abstract: Longevity crucially affects demand for pensions, insurance products and annuities. Consistent empirical evidence shows that women have historically experienced lower mortality rates than men. In this paper, we study a measure of the gender gap in mortality rates, we call “Gender Gap Ratio”, across a wide range of ages and for four countries: France, Italy, Sweden and USA. We show the stylized facts that characterize the trend of the Gender Gap Ratio, both in its historical evolution and future projection. Focusing on an example temporary life annuity contract, we give a monetary consistency to the Gender Gap Ratio. The evidence we provide about a Gender Gap Ratio that ranges between 1.5 and 2.5, depending on age and country, translate into a significant reduction of up to 25% in the benefits from a temporary life annuity contract for women with respect to men, against the same amount invested in the annuity. The empirical evidence discussed in this paper documents the crucial importance of working towards a more widespread demographic literacy, e.g., a range of tools and strategies to raise longevity consciousness among individuals and policy makers, in the framework of gender equality policies.
    Keywords: Gender gap in mortality, financial well-being, demographic literacy
    JEL: G53 J11 J16
    Date: 2023–01
  8. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa); Mushfiqur Rahman (University of Wales, UK)
    Abstract: The study assesses linkages between information technology, inequality and adult literacy in 57 developing countries for the period 2012-2016. Income inequality is measured with the Gini coefficient while six dynamics of information technology are taken on board, namely: use of virtual social network, internet access in schools, internet penetration, mobile phone penetration, fixed broadband subscription and number of personal computer users. The findings show that only internet access in schools unconditionally promote adult literacy. The corresponding inequality threshold that should not be exceeded in order for internet access in schools to continue promoting adult literacy is 0.739 of the Gini coefficient. Policy implications are discussed.
    Keywords: information technology, inequality; adult literacy
    JEL: D10 D14 D31 D60 O30
    Date: 2023–01
  9. By: Ehrmann, Michael; Georgarakos, Dimitris; Kenny, Geoff
    Abstract: We show that the announcement of the ECB’s Strategy Review and the revision of its inflation target in summer 2021 went largely unnoticed by the wider public. Although it is hard to reach out to this group, we find evidence that communicating key elements of the strategy can enhance the perceived credibility that price stability will be maintained in the medium-term. Randomised information treatments reveal that providing additional explanations about monetary policy’s stabilising role has the strongest positive impact on credibility, boosting credibility also among the less financially literate and generating more persistent credibility gains, even after inflation increased. JEL Classification: E52, E58, E31
    Keywords: central bank communication, Consumer Expectations Survey, credibility, financial literacy, randomised control trial
    Date: 2023–02

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.