nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2023‒11‒20
five papers chosen by
Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca

  1. Digital Financial Inclusion and Remittances: An Empirical Study on Bangladeshi Migrant Households By Kazi Abdul, Mannan; Farhana, Khandaker Mursheda
  2. How Does China's Household Portfolio Selection Vary with Financial Inclusion? By Yong Bian; Xiqian Wang; Qin Zhang
  3. Which Types of Unbanked Households Are More (or Less) Likely to Open a Bank Account? By Fumiko Hayashi; Aditi Routh; Ying Lei Toh
  4. Big techs in finance By Sebastian Doerr; Jon Frost; Leonardo Gambacorta; Vatsala Shreeti
  5. How Are Financial Conditions Tracked? By Juan M. Sanchez

  1. By: Kazi Abdul, Mannan; Farhana, Khandaker Mursheda
    Abstract: Globally, large numbers of adults remain unbanked, and most of them live in rural areas of the Third World. The recent outbreak of the COVID-19 pandemic has shown us how inequalities in accessing financial services continue to affect us. However, digital financial inclusion has emerged as an effective tool used to tackle socioeconomic ills and drive economic development. In fact, due to these modern technological developments, the number of studies in this area is very limited, especially in the context of developing economies. This study examines the impacts of migrant remittances on digital financial inclusion within households in Bangladesh by using the Migration and Remittance Household Survey. To meet the research objectives of this study, a household survey was conducted and 2165 households interviewed in 2022–2023 in Bangladesh. The survey data collected was tested using univariate and multivariate estimations. This study finds that the coefficient of remittance has positive relationships with the probability of e-bank accounts and the use of mobile banking for a household’s financial transactions. However, the use of ATM cards by households for financial transactions has not been significantly affected. The article concludes that remittance flows may enhance access to and use of means of digital financial inclusion by reducing some of the barriers and costs in Bangladesh, which could greatly contribute to the country’s economic growth by creating and increasing a strong fund for investment. The findings of this study can help in taking various steps to facilitate the most powerful financial sector of Bangladesh, namely, remittance management.
    Keywords: digital financial inclusion; migration; remittance; household; rural–urban; Bangladesh
    JEL: O3 R00 R23 R29
    Date: 2023–08–01
  2. By: Yong Bian; Xiqian Wang; Qin Zhang
    Abstract: Portfolio underdiversification is one of the most costly losses accumulated over a household's life cycle. We provide new evidence on the impact of financial inclusion services on households' portfolio choice and investment efficiency using 2015, 2017, and 2019 survey data for Chinese households. We hypothesize that higher financial inclusion penetration encourages households to participate in the financial market, leading to better portfolio diversification and investment efficiency. The results of the baseline model are consistent with our proposed hypothesis that higher accessibility to financial inclusion encourages households to invest in risky assets and increases investment efficiency. We further estimate a dynamic double machine learning model to quantitatively investigate the non-linear causal effects and track the dynamic change of those effects over time. We observe that the marginal effect increases over time, and those effects are more pronounced among low-asset, less-educated households and those located in non-rural areas, except for investment efficiency for high-asset households.
    Date: 2023–11
  3. By: Fumiko Hayashi; Aditi Routh; Ying Lei Toh
    Abstract: Using multi-year survey data, we conduct a regression model analysis to examine which types of unbanked households are more likely to open a bank account and which types are less likely. We proxy for households’ likelihood of opening a bank account using their prior banking status and interest in having a bank account. Unbanked households who previously had a bank account and are interested in having a bank account are more likely to open an account. These households tend to be more educated, to be native-born, to use alternative financial services, and to have access to digital technology. In contrast, households who never had a bank account and are uninterested in a bank account are less likely to open an account. These households tend to be less educated, to be of a racial minority, to be foreign born, to lack access to digital technology, and to rely heavily on cash. Moreover, they tend to distrust banks. Advancing financial inclusion for this group will require strategies to increase their trust in the financial services industry.
    Keywords: unbanked consumers; financial services; racial equity
    JEL: D12 G21 G23 G41
    Date: 2023–06–20
  4. By: Sebastian Doerr; Jon Frost; Leonardo Gambacorta; Vatsala Shreeti
    Abstract: The entry of big tech companies into the financial services sector can bring significant benefits in terms of efficiency and financial inclusion. Yet big techs can also quickly dominate markets, engage in discriminatory behaviour, and harm data privacy. This leads to the emergence of new trade-offs between policy goals such as financial stability, competition and privacy. Regulators, both domestically and internationally, are actively working to address these trade-offs. This paper provides an overview over the state of the literature and the policy debate.
    Keywords: big techs, financial inclusion, competition, financial stability, data privacy
    JEL: E51 G23 O31
    Date: 2023–10
  5. By: Juan M. Sanchez
    Abstract: Standard financial conditions indexes use financial variables, which don’t necessarily capture how easy or hard it is for households and firms to access credit. How does a new index that doesn’t rely on such variables compare?
    Keywords: financial conditions indexes
    Date: 2023–07–31

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