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on Financial Literacy and Education |
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Issue of 2025–09–01
seven papers chosen by Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca |
| By: | Ozili, Peterson K |
| Abstract: | This study presents an overview of digital financial inclusion research and developments around the world. The literature has paid little attention to the uneven digital financial inclusion developments in different regions of the world. There is a need for an overview of the existing digital financial inclusion research and developments around the world to gain insight into digital financial inclusion trends and to chart some directions for future research. It was shown that digital financial inclusion has a beneficial positive effect on wellbeing and society. There are uneven positive developments in digital financial inclusion across regions. The determinants of digital financial inclusion are varied according to regions. Every region is faced with a unique set of challenges that limit progress in digital financial inclusion. |
| Keywords: | financial inclusion, digital financial inclusion, digital technology, fintech, Africa, Europe, Asia, Australia, America. |
| JEL: | G21 G23 G28 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125394 |
| By: | Moawad, Jad (Department of Social Policy and Intervention, University of Oxford) |
| Abstract: | The increasing complexity of financial markets and the shift towards individual responsibility for retirement savings highlight the importance of sound financial decision-making. However, significant gaps persist, with women and individuals from lower socioeconomic backgrounds often exhibiting lower financial literacy and market participation. While the effectiveness of broad financial education is debated, the impact of targeted, concise information on specific investment behaviors remains unclear. We conducted a pre-registered randomized controlled trial with a representative sample of U.S. adults (N=2, 568) to investigate whether providing specific information about Exchange-Traded Funds (ETFs) - comparing their risks and returns to those of alternatives like gold, individual stock, savings, and cryptocurrency - could influence investment choices and reduce demographic gaps. Participants made allocation decisions for a real $100 lottery prize invested for one year. We find that the informational intervention significantly increased allocation to ETF (+17.8 percentage points) on average, shifting funds from savings, gold, and individual stock. Crucially, the intervention had larger effects among women, individuals without a bachelor's degree, and those from lower social origins, substantially eliminating the gender gap and narrowing gaps based on education and social origin. These results demonstrate that targeted, product-specific financial information can be a powerful tool to reduce investment inequalities and promote financial inclusion. |
| Keywords: | Financial Literacy, Investment Behavior, Randomized Controlled Trial (RCT), Financial Inclusion, Portfolio allocation |
| JEL: | G11 G53 C93 D14 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:amz:wpaper:2025-16 |
| By: | Iustina Alina Boitan (Bucharest University of Economic Studies); Thomas Paulovici (Bucharest University of Economic Studies, Doctoral School of Finance) |
| Abstract: | The paper investigates the potential of Central Bank Digital Currencies (CBDCs) to enhance financial inclusion by improving access to digital financial services for unbanked populations, particularly in developing economies where the issue of financial exclusion and low access to financial services is endemic. Our analytical interest substantiates inthe growing interest exhibited by central banks and international financial institutions regarding the emergence of this new type of state-backed digital currency. CBDCs represent digital forms of central bank money that may serve as complement to cash and other payment instruments in a secure, efficient, and accessible payment environment, unlike cryptocurrencies, which operate on decentralized networks. While CBDCs offer promising features such as cost efficiency, security, and accessibility, several challenges, including design deficits, digital and financial literacy barriers, and regulatory considerations must be addressed to ensure their effectiveness. Through a systematic review of existing academic literature, empirical evidence and case studies from some developing or emerging economies, this study examines positive impacts as well as the challenges of these CBDCs in promoting financial inclusion. In particular, it investigates the theoretical mechanisms through which CBDCs could enhance access to financial services, and the challenges that may hinder their effectiveness. Furthermore, the analysis draws on a series of case studies from some of the early CBDC adopters, to identify the real-world impact of CBDCs on financial inclusion. The findings suggest that while CBDCs have the potential to bridge financial gaps, their success depends on strategic design and implementation as well as on complementary policies. The paper further discusses policy recommendations for designing CBDCs that maximize their potential as an inclusion-enhancing tool. |
| Keywords: | Central Bank Digital Currencies, Central Banks, Financial Inclusion, Digital Payments, Developing Economies, eNaira, Sand Dollar |
| JEL: | E50 |
| URL: | https://d.repec.org/n?u=RePEc:sek:iefpro:15116731 |
| By: | Olivia Lu (Hamilton High School) |
| Abstract: | Financial exclusion remains one of the most persistent barriers to economic development, constraining private-sector growth, limiting poverty reduction, and perpetuating economic disparities. Bilateral foreign aid has long been a tool for addressing financial sector deficiencies, yet its impact on financial inclusion remains debated. Can aid meaningfully expand access to credit, increase financial intermediation, and strengthen institutional governance? Or does it merely act as a temporary fiscal injection with limited structural impact? To assess how foreign aid influences financial sector development and financial inclusion, this study analyzes the cases of Bangladesh, Rwanda, and Mozambique from 2012-22, focusing on both formal and informal financial intermediaries. This paper analyzes macroeconomic data, financial sector indicators, aid disbursement trends, and governance metrics to empirically evaluate the relationship between aid and financial inclusion. Using sectoral disaggregation of aid flows and institutional effectiveness scores, the research traces the pathways through which aid channels into financial systems and whether it translates into higher private-sector credit, reduced borrowing constraints, improved banking efficiency, and sustainable microfinance growth. Aid flows are analyzed across three key subsectors: (1) Financial Policy and Administrative Management, (2) Formal Financial Intermediaries, and (3) Informal Financial Intermediaries, providing a granular assessment of how different forms of aid impact banking stability, microfinance participation, and credit accessibility across varying institutional environments.The impact of foreign aid on financial inclusion depends on how well funding aligns with governments? priorities in existing policies. Bangladesh and Rwanda have seen stronger growth in microfinance, digital banking, and SME credit, while Mozambique has struggled due to weak institutions and economic instability. Policy aid has helped Rwanda strengthen financial regulations, but in Mozambique, even large inflows have failed to improve oversight. But aid to banks does not always increase lending. Bangladesh saw improved efficiency, but Rwanda and Mozambique still face high interest rate spreads, which could point to deeper financial inefficiencies. Finally, microfinance aid is most effective when paired with strong local policies. While Bangladesh and Rwanda sustain growth even as aid declines, Mozambique?s financial access stalls once donor support fades, showing that without strong institutions, financial inclusion remains fragile.Ultimately, this study contributes to the literature on international aid and development by identifying the conditions under which aid strengthens financial systems rather than acting as a temporary economic stimulus. To be truly effective, donor assistance must go beyond short-term interventions and support structural changes that allow financial sectors to grow independently. |
| Keywords: | Foreign aid, Financial inclusion, Microfinance, Governance, Banking efficiency |
| JEL: | F35 O16 G21 |
| URL: | https://d.repec.org/n?u=RePEc:sek:iefpro:15116716 |
| By: | Chrizaan Grobbelaar (Central University of Technology, Bloemfontein); Liezel Alsemgeest (University of the Free State, Bloemfontein) |
| Abstract: | The retirement preparedness crisis presents significant challenges not only for individuals but also for broader economic stability. Millennials, the cohort born between 1981 and 2000, are currently the largest workforce in employment. They face increasing financial pressures, including student debt and volatile job markets, so the urgency to enhance retirement readiness is crucial. This study explores how gamified financial education can improve retirement preparedness and its subsequent impacts on business, finance, and economic systems.A large percentage of millennials are inadequately prepared for retirement, and many lack the necessary financial literacy to make informed decisions. This shortfall in retirement preparedness for a large part of the workforce can exacerbate wealth inequality and place additional burdens on government welfare systems, as inadequate retirement savings could lead to increased reliance on government support, potentially costing taxpayers billions annually.The process of incorporating game concepts into non-gaming contexts, such as retirement planning, has become a popular strategy for educating people about money. Gamified applications have demonstrated the potential to improve user engagement and comprehension by turning complex financial topics into interactive experiences. One of the most important aspects of retirement preparedness is financial literacy. People who are more financially literate are more likely to plan for retirement successfully. In order to promote a culture of proactive financial planning, financial literacy must be incorporated into both workplace training programs and educational curricula.The randomised controlled experiment was conducted in the form of a pre-test, intervention, and a post-test. The pre-test determined the financial literacy levels and retirement preparedness of the millennial participants. A gamified retirement planning education application was developed and tested for its effectiveness in increasing retirement preparedness. A randomised control trial (n=90) with three different groups (control group, traditional educational group and the gamification group) revealed that gamification increased awareness of the need to save for retirement for both the traditional educational group and the gamification group. The gamification group was the only group that demonstrated an increase in their mean score for their interest in retirement planning. The data underscores gamification?s unique capacity to address behavioural barriers to retirement planning. Features like simulated ageing avatars and real-time savings visualisations increased the engagement of participants. The implications of enhanced retirement preparedness extend beyond individual benefits; they encompass broader economic impacts that can drive sustainable growth and stability. Policymakers must prioritise initiatives that promote financial literacy and gamified education strategies within workplaces to ensure that future generations are equipped for financial independence in retirement. |
| Keywords: | Retirement preparedness, Gamification, Financial literacy, Millennial |
| JEL: | G23 D14 A20 |
| URL: | https://d.repec.org/n?u=RePEc:sek:iacpro:15216657 |
| By: | Dzung Bui (Philipps-Universität Marburg, Marburg Center for Institutional Economics and Sustainability (MACIES)); Bernd Hayo (Philipps-Universität Marburg, Marburg Center for Institutional Economics and Sustainability (MACIES)) |
| Abstract: | This paper examines the causal effect of supply constraints on inflation expectations, using a survey experiment conducted with a representative sample of German adults. Respondents first reported their prior beliefs about both official and personal inflation. They were then presented with information about Germany's 2022 supply bottlenecks and randomly assigned to one of three hypothetical scenarios for 2025. Exposure to either shortage scenario significantly increased the likelihood of revising inflation expectations. Personal exposure to supply shortages in daily life and financial literacy also influenced how respondents revised expectations. A topic analysis of open-ended responses provides further insights into how people interpret and react to perceived product scarcity. |
| Keywords: | Inflation expectation, Supply shortages, Survey experiment, Germany |
| JEL: | D12 D83 D84 E31 E71 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:mar:magkse:202520 |
| By: | Dariusz Filar; Andrzej Reich; Michał Polasik; Ewa Balcerowicz |
| Abstract: | The subject of this publication, reflecting the discussion held between experts on 30 March 2023, is that of housing loans in Poland. The publication focuses primarily on discussing the state of mortgages (at the end of the first quarter of 2023). This state is the effect of (a) legislation, (b) institutional solutions, (c) past processes in the financing of housing loans, and recently also (d) the high level of inflation dampening both lending by the banks and the level of interest among bank customers. The publication’s second purpose is to present recommendations which, once put into effect, could rectify today’s lamentable situation. All of the proposals presented in this publication lead to one general recommendation: the answer to the current shortcomings lies not in isolated, single changes; what is essential is a new system for the market. This new system should be (a) flexible, (b) free of legal risk while at the same time (c) better protected against market risk, and (d) it should also contain a more comprehensive range of products; on this market (e) the state, as the regulator, should intervene ex-ante and not only ex-post (as has been the case in Poland for the last 20 years), while (f) customers should have the essential minimum of financial knowledge, first and foremost regarding awareness of the risk related to, which by their very nature are long-term loans. |
| Keywords: | home loan, mortgage, Swiss franc loans, balanced mortgage, new loans, banking system, legal risk, market risk, interest rates, home loans market, financial education, Poland |
| JEL: | G21 G28 G51 G53 |
| Date: | 2024–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:sec:mbanks:0176 |