|
on Financial Literacy and Education |
|
Issue of 2025–01–13
nine papers chosen by Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca |
| By: | Balana, Bedru; Olanrewaju, Opeyemi |
| Abstract: | This paper examines the effects of financial inclusion on adoption and intensity of use of agricultural inputs and household welfare indicators using data from the nationally representative Nigerian LSMS wave-3 (2015/2016) survey. For this, we constructed a financial inclusion index from four formal financial services access indicators (bank account, access to credit, insurance coverage, and digital transaction) using multiple correspondence analysis (MCA). We used Cragg’s two-step hurdle, instrumental variables for binary response variables, and a Generalized Method of Moments (GMM) models in the econometric analysis. Results show that households with access to formal financial services are more likely to adopt agricultural inputs and to apply these more intensively. These same households are less likely to experience severe food insecurity and are more likely to consume diverse food items. We also find that these effects are less for female farmers regardless of formal financial inclusion, suggesting that they may bear more non-financial constraints than their male counterparts. The results suggest a need for targeted interventions to increase access to formal financial services of farm households and gender-responsive interventions to address the differential constraints women farmers face. |
| Keywords: | farm inputs; financial inclusion; food security; households; inorganic fertilizers; seeds; Africa; Western Africa; Nigeria |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:ifprid:2293 |
| By: | Mr. Kalin I Tintchev; Kady Keita |
| Abstract: | We document novel evidence that confidence in macrofinancial stability has a positive impact on financial inclusion in CCA countries and more broadly. This channel is particularly important for CCA countries, with confidence gains of 1 unit leading to 0.7 unit improvement in financial inclusion. Institutional factors such as level of governance and reliance on transparent policy rules and robust financial safety nets explain a large fraction of the variability in confidence in the region. We find that governance reforms are critical for deepening financial inclusion while the impact of inflation targeting, fiscal rules and deposit insurance schemes is positive and material only when governance levels exceed certain thresholds. |
| Keywords: | Financial inclusion; confidence; governance; inflation targeting; fiscal rules; deposit insurance |
| Date: | 2024–12–20 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/257 |
| By: | de Brauw, Alan; Gilligan, Daniel O.; Herskowitz, Sylvan; Roy, Shalini |
| Abstract: | Mobile money can be a vehicle for improving financial access, particularly among disadvantaged populations. For mobile money systems to play this role, though, members of disadvantaged groups must both enroll in and begin to use mobile money systems. In this paper, we describe a randomized trial conducted in collaboration with a bank in Somali region, Ethiopia, that attempted to stimulate use among recent mobile money enrollees in areas near refugee camps. We provide one group with a small transfer to their mobile money account and another group is told they will receive a small transfer if they first make three transactions of any type within a promotional period. The unconditional transfer induces a 9.3 percentage point increase in customers making at least one transaction, while the conditional transfer has no significant effect. The effect is larger among men, but there is evidence that it also induces use among women. |
| Keywords: | access to finance; refugees; gender; digital technology; currencies; finance; mobile phones; Eastern Africa; Africa; Ethiopia |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:ifprid:2295 |
| By: | Barboni, Giorgia (Warwick University); de Roux, Nicolás (Universidad de los Andes); Perez-Cardona, Santiago (University of Chicago) |
| Abstract: | We conducted a telephonic survey experiment with 2, 214 Venezuelan migrants to examine how their perceptions of Colombian’s social acceptance influence their engagement with the financial system. We find that 66% of the subjects we interviewed underestimate the extent to which natives are open towards migrants. We then show that providing accurate information reduces belief errors by 23 percentage points. This correction increases migrants’ willingness to interact with the financial system. In particular, individuals who initially underestimated Colombian’s acceptance of migrants are 15% more likely to visit a bank and request financial information in the next two months relative to the control group. These individuals also show a 12% increase in the willingness to open a digital wallet and an 18% increase in the willingness to open a savings account. These effects are concentrated among individuals who have not experienced episodes of discrimination in Colombia. We find no effects on the willingness to apply for a loan or an insurance product, consistent with the idea that supply barriers play a significant role for the financial inclusion of vulnerable populations. Using an instrumental variable strategy, we show that the increased willingness to engage with the financial system is driven by belief updating. Our findings highlight that misperceptions about native’s social acceptance of migrants can drive self-exclusion from the financial system. |
| Keywords: | Financial Inclusion; Migration; Beliefs; Social Acceptance |
| JEL: | D83 D91 F22 G51 |
| Date: | 2024–12–13 |
| URL: | https://d.repec.org/n?u=RePEc:col:000089:021278 |
| By: | Lukasz Grzybowski (University of Warsaw, Faculty of Economic Sciences); Valentin Lindlacher (TU Dresden); Onkokame Mothobi (University of Witwatersrand) |
| Abstract: | In this paper, we utilize survey data collected in 2017 from 12, 735 individuals across nine Sub-Saharan African countries. We merge the survey data with geographic information related to the proximity of mobile network towers and banking facilities, based on the geo-locations of the respondents. Our estimation approach comprises a two-stage model. In the first stage, consumers make choices between adopting a feature phone or a smartphone. In the second stage, they make decisions regarding the use of mobile money services. Our findings reveal that network coverage significantly influences the adoption of mobile phones. Moreover, we observe that mobile money services are more favored by younger and relatively wealthier individuals for sending money, while older individuals and those with lower incomes tend to use mobile wallets for receiving money. Consequently, mobile money services facilitate younger migrant workers residing in areas with better infrastructure in providing support to their older relatives in less developed regions. |
| Keywords: | Mobile money, Sub-Saharan Africa, Financial inclusion |
| JEL: | O12 O16 O18 O33 L86 L96 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:war:wpaper:2024-20 |
| By: | Fafchamps, Marcel (Stanford University); Islam, Asadul (Monash University); Pakrashi, Debayan (Indian Institute of Technology Kanpur); Tommasi, Denni (University of Bologna) |
| Abstract: | We conduct a clustered randomized controlled trial across 180 villages in Uttar Pradesh, India, to promote the take-up of a savings commitment product newly introduced to our study population. A random subset of participants was targeted through our promotional campaign to test whether the product's diffusion among untargeted participants operates primarily through information sharing or through persuasion by incentivized target participants. If social learning is the main channel of diffusion, we would expect higher sign-up and take-up rates in information villages compared to persuasion villages. Conversely, if persuasion is the primary channel, sign-up and take-up rates should be higher in persuasion villages. Our findings consistently favor the persuasion channel, as sign-up and take-up rates were higher in the persuasion treatment, even without increased financial literacy or knowledge about the product. Information alone had a negligible impact on take-up, while the combined treatment achieved the highest sign-up and conversion rates, suggesting that information complements persuasion by enhancing its effectiveness. These results highlight the importance of incentivized persuasion in promoting product take-up and suggest that, in certain contexts, direct information-sharing may be less effective than previously assumed. |
| Keywords: | diffusion, social networks, savings, financial inclusion, information, persuasion |
| JEL: | O16 D14 G21 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17555 |
| By: | Giang Nghiem; Lena Drager; Ami Dalloul |
| Abstract: | This paper explores communication strategies for anchoring households’ medium-term inflation expectations in a high inflation environment. We conducted a survey experiment with a representative sample of 4, 000 German households at the height of the recent inflation surge in early 2023, with information treatments including a qualitative statement by the ECB president and quantitative information about the ECB’s inflation target or projected inflation. Inflation projections are most effective, but combining information about the target with a qualitative statement also significantly improves anchoring. The treatment effects are particularly pronounced among respondents with high financial literacy and high trust in the central bank. |
| Keywords: | anchoring of inflation expectations, central bank communication, survey experiment, randomized controlled trial (RCT) |
| JEL: | E52 E31 D84 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2024-70 |
| By: | Daniela Balutel; Walter Engert; Christopher Henry; Kim Huynh; Doina Rusu; Marcel Voia |
| Abstract: | In the rapidly evolving landscape of digital asset markets, measuring cryptoasset knowledge alongside financial knowledge enhances our understanding of individuals' decisions to purchase cryptoassets. Using microdata from the Bank of Canada’s Bitcoin Omnibus Survey, we measure familiarity with crypto concepts using a set of three questions covering basic aspects of Bitcoin. Familiarity with financial concepts is measured using a set of three questions covering basic aspects of conventional finance. We also consider gender differences across these measures. A novel aspect of this paper is an empirical joint analysis that allows us to consider the interrelationship between these two measures of crypto and financial knowledge. |
| Keywords: | Central bank research; Digital currencies and fintech; Econometric and statistical methods |
| JEL: | C81 D14 D91 G53 O51 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocawp:24-48 |
| By: | Deepa Dhume Datta; Robert J. Vigfusson |
| Abstract: | Relative to diversity, inclusion is much harder to measure. We measure inclusion of women in economics using novel data on coauthoring relationships among Federal Reserve Board economists. Individual coauthoring relationships are voluntary, yet inclusion in coauthoring networks can be central to research productivity and career success. We document gender affinity in coauthoring, with individuals up to 34 percent more likely to have a same-gender coauthor in the data relative to what would be predicted by random assignment. Because women account for under 30 percent of Federal Reserve Board economists, gender affinity in coauthoring relationships may reduce research opportunities for women relative to their men peers. Whereas commonality of research interests is not sufficient to explain observed gender affinity in coauthoring, we find that paper outcomes may encourage gender affinity, in that papers authored by only men are more downloaded and more likely to be published than papers by mixed-gender teams. Gender affinity may contribute to the gender gap in authoring as well: women make up only 23 percent of authors in the later part of our sample, about 4 percentage points below their share of the economist population. We estimate that reducing gender affinity by men could eliminate between 1.5 to 3 percentage points of the gender gap in observed research output by women. Our findings on gender affinity in coauthoring provide an empirical assessment of the state of inclusivity in economics. |
| Keywords: | Central banks; Coauthoring networks; Diversity; Gender affinity; Inclusion; Leaky pipeline |
| JEL: | A14 J16 E58 |
| Date: | 2024–12–05 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:2024-91 |