nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2023‒11‒13
seven papers chosen by
Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca


  1. The Future of Financial Inclusion By Ozili, Peterson K
  2. Benefits of digital-only financial inclusion By Ozili, Peterson K
  3. Why is financial inclusion so popular? An analysis of development buzzwords By Ozili, Peterson K
  4. Impact of financial inclusion on economic growth: review of existing literature and directions for future research By Ozili, Peterson
  5. Corporate governance and financial inclusion By Ozili, Peterson K
  6. Selection into Financial Education and Effects on Portfolio Choice By Irina Gemmo; Pierre-Carl Michaud; Olivia S. Mitchell
  7. Digital Solutions Guidelines for Public Financial Management By Lorena Rivero del Paso; Sailendra Pattanayak; Gerardo Uña; Hervé Tourpe

  1. By: Ozili, Peterson K
    Abstract: This paper provides insight into the trends to expect in the future of financial inclusion. The author identifies the past and recent changes occurring in the financial inclusion space, and based on these changes, make predictions about what to expect in the future of financial inclusion. The author predicts that, in the future, financial inclusion will witness increased digitalization; increased personalization of formal financial services; the provision of a wide range of formal financial services from a single platform; a shift from account number to mobile number to drive financial inclusion; more women will become financially empowered and financially independent; government will become more directly involved in delivering basic financial services to the poor; and we will witness the emergence of new financial innovations that continuously reduce transaction costs. These future trends will have implications for financial inclusion in Asia, Europe and particularly in Africa where the level of financial inclusion is low.
    Keywords: Financial inclusion, digital finance, Fintech, access to finance, central bank digital currency, women.
    JEL: G21 I31 I38
    Date: 2023
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:118800&r=fle
  2. By: Ozili, Peterson K
    Abstract: Many countries are using digital tools and technologies to increase financial inclusion and improve the well-being of households and communities. There is growing interest in using only digital tools to increase financial inclusion. A term used to describe this is digital-only financial inclusion. This chapter identifies the benefits of digital-only financial inclusion. The benefits include convenience, ensuring digital access to additional financial services, generating useful data to improve customers’ welfare, increased safety, enabling the democratisation of financial services, improving social welfare and economic growth, reaching the poorest in remote areas, and increasing digital literacy. Policymakers and financial sectors agents should be aware of the benefits of digital-only financial inclusion while being mindful of the associated risks.
    Keywords: financial inclusion, digital financial inclusion, fintech, digital technology.
    JEL: G20
    Date: 2023
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:118796&r=fle
  3. By: Ozili, Peterson K
    Abstract: We analyse the popularity of the term ‘financial inclusion’ in relation to other development buzzwords. We extract trend data for multiple development buzzwords across countries and cities from 2004 to 2022 and we run a series of empirical analyses. We find that the ‘financial inclusion’ buzzword is popular because the term ‘financial inclusion’ is correlated with other development buzzwords particularly ‘microfinance’, ‘digital finance’, ‘inclusive finance’, ‘financial exclusion’ and ‘fintech’ buzzwords. Financial inclusion buzzword is more popular in developing countries than in developed countries. Financial inclusion buzzword is also popular in major cities in developing countries. We also observe that the financial inclusion buzzword was more popular during the second wave of the COVID-19 pandemic. There is uni-directional causality between interest in financial inclusion and interest in fintech and inclusive finance, indicating that interest in financial inclusion buzzword causes interest in fintech and inclusive finance buzzword. There is also uni-directional causality between interest in financial exclusion and interest in financial inclusion. Finally, there is a significant correlation between interest in the ‘financial inclusion’, ‘digital finance’, ‘inclusive finance’ and ‘fintech’ buzzwords.
    Keywords: buzzword, development, microfinance, financial inclusion, digital finance, fintech, inclusive finance, financial exclusion.
    JEL: I31 I38 I39
    Date: 2023
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:118792&r=fle
  4. By: Ozili, Peterson
    Abstract: The impact of financial inclusion on economic growth is a topic that is generating widespread interest among researchers and practitioners. We review the existing literature to highlight the state of research in the literature and identify new opportunities for innovative research. We used a thematic literature review methodology which involves dividing the review along relevant themes. We find that significant research on the topic emerged in the post-2016 years. Most of the existing studies are from developing countries and from the Asian and African regions. Existing studies have not utilized relevant theories in explaining the impact of financial inclusion on economic growth. Most studies report a positive impact of financial inclusion on economic growth while very few studies show a negative impact. The most common channel through which financial inclusion affects economic growth is through greater access to financial products and services offered by financial institutions that increases financial intermediation and translates to positive economic growth. The common empirical methodology used in the literature are causality tests, cointegration and regression methods. Multiple proxies of financial inclusion and economic growth were used in the literature which partly explains the conflicting result among existing studies. The review paper concludes by identifying some directions for future research.
    Keywords: financial inclusion, economic growth, literature review, access to finance, GDP, GDP per capita, causality tests, regression, cointegration, Africa, Europe, Asia, financial inclusion, index, theory.
    JEL: E30 E32 G21
    Date: 2023
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:118788&r=fle
  5. By: Ozili, Peterson K
    Abstract: This paper examines the association between corporate governance and financial inclusion in terms of correlation and causation. It examines whether countries that have a strong corporate governance environment also have better financial inclusion outcomes. The indicators of financial inclusion are automated teller machines (ATMs) per 100, 000 adults, bank accounts per 1, 000 adults and bank branches per 100, 000 adults, while the indicators of corporate governance are extent of corporate transparency index, the extent of director liability index, the extent of disclosure index, the extent of ownership and control index, the extent of shareholder rights index, minority investors protection index and ease of shareholder suits index. The data were analyzed using Pearson correlation and granger causality tests. The results indicate that strong corporate governance is significantly correlated with better financial inclusion outcomes. The regional analyses show that corporate governance has a significant positive association with financial inclusion in Asian countries and in Middle East countries. However, a positive and negative association was observed between some indicators of corporate governance and financial inclusion in European countries, North American countries, South American countries, African countries and in Middle East and North Africa countries (MENA) countries, implying that strong corporate governance has a positive and negative association with financial inclusion depending on the indicators of corporate governance and financial inclusion used. There is also evidence of uni-directional granger causality between corporate governance and financial inclusion.
    Keywords: financial inclusion, corporate governance, financial institutions
    JEL: M12 M14
    Date: 2023
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:118799&r=fle
  6. By: Irina Gemmo; Pierre-Carl Michaud; Olivia S. Mitchell
    Abstract: To examine how financial education affects financial outcomes, one must evaluate whether and how sample selection may bias inferences regarding program impacts. Our incentivized experiment reveals how such selection influences estimated financial education effects. The more financially literate and those expecting higher gains pay more to purchase education, while those who consider themselves very financially literate pay less. Using portfolio allocation tasks, we show that the financial education increases portfolio efficiency and welfare by almost 20 and 3 percentage points, respectively. In our setting, selection does not greatly influence estimated program effects, comparing those participating and those who do not. Pour examiner comment l'éducation financière affecte les résultats financiers, il faut évaluer si et comment la sélection de l'échantillon peut fausser les résultats concernant l'impact du programme. Notre expérience incitative révèle comment une telle sélection influence les effets estimés de l'éducation financière. Les personnes les plus instruites sur le plan financier et celles qui s'attendent à des gains plus importants paient davantage pour acquérir une éducation, tandis que celles qui se considèrent comme très instruites sur le plan financier paient moins. En utilisant des tâches d'allocation de portefeuille, nous montrons que l'éducation financière augmente l'efficacité du portefeuille et le bien-être de près de 20 et 3 points de pourcentage, respectivement. Dans notre contexte, la sélection n'influence pas beaucoup les effets estimés du programme, en comparant les participants et les non-participants.
    Keywords: Financial Education, Financial Literacy, Portfolio Choice, Selection, Ãducation financière, littératie financière, choix du portefeuille, sélection
    JEL: G11 G41 G53
    Date: 2023–09–28
    URL: http://d.repec.org/n?u=RePEc:cir:cirwor:2023s-21&r=fle
  7. By: Lorena Rivero del Paso; Sailendra Pattanayak; Gerardo Uña; Hervé Tourpe
    Abstract: The Digital Solutions Guidelines for Public Financial Management (Guidelines) are intended to serve as a comprehensive reference material for the assessment, design, and improvement of digital initiatives in the public financial management (PFM) area. To support the digital transformation of PFM functions, the Guidelines are structured around three Pillars – Functional, IT Architectural, and Governance and Management. Each pillar comprises six principles, which are further broken down into one to four attributes to promote more efficient and transparent PFM operations while fostering innovation and managing digital risks. These Guidelines also allow a graduated approach to digital transformation of PFM through three levels of maturity for each Attribute – foundational, intermediate, and advanced – to help take into account country-specific contexts and capacities in digital transformation strategies.
    Keywords: Digitalization; Digital Transformation; Public Financial Management; GovTech; Financial Management Information Systems; Open Data; IMF Library; PFM function; solutions guidelines implementation tool; manuals 2023/07; title page; PFM information systems; Budget execution and treasury management; Budget planning and preparation; Global
    Date: 2023–10–06
    URL: http://d.repec.org/n?u=RePEc:imf:imftnm:2023/007&r=fle

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