nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2023‒11‒06
four papers chosen by
Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca

  1. Ethnic diversity and financial inclusion in post-apartheid South Africa By Isaac Koomson; Michael Danquah; Edward Martey
  2. Financial inclusion in South Africa - Influencing factors and public policy By Marybeth-Rouse; Bernardo Batiz-Lazo; Santiago Carbo-Valverde
  3. Student debt and behavioral bias: a trillion dollar problem By Praful Raj
  4. Digital Transformation and Financial Inclusion: A Strategic Imperative for Morocco's Banking Sector By Bouchtaoui Mohamed

  1. By: Isaac Koomson; Michael Danquah; Edward Martey
    Abstract: The ethnic diversity-financial inclusion nexus remains one of the least explored topics in the literature despite global attempts to promote cultural mixing due to its socioeconomic benefits. We contribute to the literature by examining the link between ethnic diversity and financial inclusion using five-wave panel data from South Africa, a country noted for its diverse ethnic groups with unique knowledge stock. We measure financial inclusion using a multidimensional construct, while ethnic diversity is conceptualized using fractionalization and polarization indexes.
    Keywords: Ethnic diversity, Financial inclusion, Employment, Ethnic group, South Africa
    Date: 2023
  2. By: Marybeth-Rouse (University of Johannesburg (South Africa)); Bernardo Batiz-Lazo (Anahuac University (Mexico) and Northumbria University (UK)); Santiago Carbo-Valverde (University of Valencia (Spain))
    Abstract: This paper explores the effectiveness of public policy in increasing financial inclusion. A large data set is used comprising repeat household surveys undertaken over a ten-year period. Contrary to previous results, the paper provides evidence of the strong impact of policy on access to financial services in South Africa. South Africa adopted a formal financial sector consensus model and, together with private sector development, succeeded in increasing access to financial services to the previously unbanked. The findings suggest that between 2005 and 2014, the most significant factors associated with financial inclusion were income, education level and age. Furthermore, those with a tertiary education were 31% more likely to have a bank account than those in the lowest education category. Policies to address the gender gap appear to have had a measure of success as the findings of this study indicate that women were 3.8% more likely to have a bank account than men. The findings further reveal that those from a black ethnic background remain less likely to be banked. Further policy interventions are therefore required.
    Keywords: Economic growth, financial inclusion, financial services, logistic regression, South Africa (SA)
    JEL: D14 G21 O4
    Date: 2023–02
  3. By: Praful Raj
    Abstract: This literature review elucidates the implications of behavioral biases, particularly those stemming from overconfidence and framing, on the intertemporal choices made by students on their underline demand preferences for student loans. A secondary objective is to understand the potential utility of social media to assist students and young borrowers with the debt repayment process and management of their loan tenures. A close examination of the literature reveals a substantial influence of these behavioral and cognitive principles on the intertemporal choices made by students towards debt repayments. This affects not only the magnitude of loans they acquire but also the anchoring of the terms of loan conditions associated with repayment. Furthermore, I establish that harnessing social media as the potential to cultivate financial literacy and enhanced understanding of loan terms to expedite the process of debt redemption. This review could serve as a valuable repository for students, scholars, and policymakers alike, in order to expound on the cognitive biases that students and consumers often face when applying and entering into loan contract.
    Date: 2023–10
  4. By: Bouchtaoui Mohamed (Faculty of Law, Economics and Social Sciences, Salé, Mohammed V University, Rabat, Morocco.)
    Abstract: This paper studies the current state of the Moroccan banking system in the context of digital economy development, to establish the benchmarks and needs for banking regulation, and to study the potential possibilities of digitalization of relations and transactions in the banking sector in the mechanism of implementing prudential rules. Digital transformation in the banking industry is associated with obstacles that seem to hinder the smooth implementation of digital approaches. This issue has not been adequately addressed in the current academic literature. The main purpose of this qualitative exploratory study is to identify the main perceived obstacles to digital transformation in the Moroccan commercial banking sector from a point of view and to analyse them accordingly. However, challenges such as low financial penetration and mismatches with costumer needs persists. The digitalization of financial services emerges as a promosing avenue to address these issues, significantly increasing financial access and inclusion in Morocco, in line with trends observed in other African Nations.
    Abstract: Cet article étudie l'état actuel du système bancaire marocain dans le contexte du développement de l'économie digitale, afin d'établir les repères et les besoins en matière de réglementation bancaire, et d'étudier les possibilités potentielles d'une digitalisation des relations et des transactions dans le secteur bancaire dans le cadre de la mise en œuvre des règles prudentielles. La transformation digitale dans l'industrie bancaire est associée à des obstacles qui semblent entraver la mise en œuvre fluide des approches numériques. Cette question n'a pas été adéquatement abordée dans la littérature académique actuelle. L'objectif principal de cette étude exploratoire qualitative est d'identifier les principaux obstacles perçus à la transformation digitale dans le secteur bancaire marocain d'un point de vue analytique. Cependant, des défis tels que la faible pénétration financière et les discordances avec les besoins des clients persistent. La digitalisation des services financiers émerge comme une avenue prometteuse pour résoudre ces problèmes, en augmentant significativement l'accès aux services financiers et en favorisant l'inclusion financière au Maroc, en conformité avec les tendances observées dans d'autres pays africains.
    Keywords: Moroccan banking sector, digital economy, digital transformation process, financial services., African Scientific Journal
    Date: 2023–09–26

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