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on Financial Literacy and Education |
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Issue of 2026–06–15
eight papers chosen by Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca |
| By: | Kumar, Atul; Nag, Biswajit |
| Abstract: | While India has made significant advancements in financial inclusion, many citizens still hold inactive bank accounts. The study investigates the barriers to financial inclusion, focusing on difficulties in maintaining active bank accounts using insights from the 2021 Global Findex database. Latent Class Analysis (LCA) was applied to classify individuals into three distinct groups based on the barriers to active banking. Results show that some face structural challenges like limited access, low income, and digital illiteracy while others consider banking unnecessary. A third group emerged showing distrust towards banks leading to disengagement. The findings highlight the need for targeted policy interventions tailored to each group’s challenges. This is crucial as we envision a Digital India, with broader use of formal banking, digital payments, promoting financial literacy and inclusion for the underserved. Reviving inactive bank accounts and addressing the root causes of inactivity are keys to reducing gaps in financial inclusion. |
| Keywords: | Financial Inclusion, Inactive Bank Accounts, Latent Class Analysis, Global Findex |
| JEL: | C38 D14 G21 |
| Date: | 2025–06–20 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:129012 |
| By: | Ali, Amjad; Butt, Mohammad Hamza; Senturk, Ismail |
| Abstract: | Decentralised finance has emerged as a transformative force in the financial sector, offering innovative solutions to enhance financial inclusion for underbanked populations. This study examines the role of decentralised finance as a catalyst for inclusive finance, focusing on its potential to deliver accessible, low-cost financial services via blockchain technology and smart contracts. Utilizing a mixed-methods approach, the research investigates the adoption, benefits, and challenges of decentralised finance in Sub-Saharan Africa, Southeast Asia, and Latin America. Quantitative analysis shows a strong correlation between decentralised finance usage and improved access to savings, credit, and remittance services. Qualitative results reveal key themes, including perceived autonomy, trust concerns, knowledge barriers, and infrastructure challenges, which differ across regions. For example, Latin American users adopt stablecoins to hedge against inflation, while Southeast Asian users rely on decentralised finance for remittances and play-to-earn gaming. Nevertheless, obstacles such as asset volatility, security risks, regulatory uncertainty, and low digital literacy impede widespread adoption. The study highlights the importance of tailored interventions, including user-friendly platforms, region-specific education, and robust infrastructure, to unlock the full potential of decentralised finance. Theoretical frameworks such as institutional theory and financial inclusion frameworks offer insights into the socio-technical factors influencing adoption. The findings call for a balanced strategy that integrates technological innovation, regulatory clarity, and community engagement to achieve equitable financial inclusion. |
| Keywords: | Decentralised Finance, Financial Inclusion, Underbanked Population |
| JEL: | E6 G20 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128755 |
| By: | Bagde, Rakshit |
| Abstract: | Digital payment technologies have significantly transformed financial systems across emerging economies. In India, the rapid expansion of the Unified Payments Interface (UPI) has reshaped payment infrastructure and expanded access to financial services. Introduced by the National Payments Corporation of India under the supervision of the Reserve Bank of India, UPI has enabled seamless real-time transactions between bank accounts through mobile devices. This study examines the relationship between digital payment adoption, financial inclusion, and rural development in India during the period 2016–2024. Using secondary data from official financial databases and national payment statistics, the research applies panel regression models and diagnostic tests to evaluate the impact of UPI transaction growth on rural income and financial access indicators. The results indicate that digital payment expansion is significantly associated with improvements in financial accessibility and rural economic outcomes. The findings highlight the role of digital payment infrastructure in promoting inclusive economic growth and strengthening financial ecosystems in developing economies. |
| Keywords: | Digital payments, UPI, Financial Inclusion, Rural Development, Fintech, India. |
| JEL: | G21 G28 G29 |
| Date: | 2026–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128929 |
| By: | Moiz, Abdul; Siddiqui, Danish Ahmed |
| Abstract: | The economic growth of developing economies depends heavily on Small and Medium Enterprises (SMEs) since they generate significant GDP and employment numbers in Pakistan and other emerging markets. The sustainability of these businesses faces frequent obstacles because they encounter restricted financial resources and poor financial expertise alongside cautious managerial decision-making. This study explored how financial literacy affects SME sustainability. We proposed that financial literacy components i.e. budgeting, investment analysis, and risk management, improve access to finance in turn leading to SME sustainability. We also contend that financial risk attitude moderates the relationship between financial literacy components and sustainability in a way that a higher risk attitude would lead to a more pronounced effect. Empirical validity was established by conducting a survey using a close-ended questionnaire. A structured questionnaire was used to gather data from 309 SME owners financial managers and operational managers who resided in five major Pakistani cities. The analysis employed Partial Least Squares Structural Equation Modeling (PLS-SEM) to process the data. The results show that budgeting (β = 0.165, p = 0.010) and risk management (β = 0.424, p |
| Keywords: | SME Sustainability, Financial Literacy, Access to Finance, Financial Risk Attitude, Pakistan SMEs, PLS-SEM Analysis |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:341018 |
| By: | Ludolph, Melina; Nghiem, Giang; Tonzer, Lena |
| Abstract: | We examine whether combining factual information on inflation levels and forecasts with a narrative can persistently shape consumers' inflation expectations. In a preregistered randomized controlled trial with a representative sample of 3, 000 German consumers, participants received either numerical or textual information about inflation rates, with or without an accompanying narrative. All treatments immediately lower inflation expectations, with numerical information eliciting stronger adjustments. Adding a narrative produces no additional immediate effect, confirming that it conveys no new information. However, only the combination of numerical information with a narrative yields a lasting reduction in inflation expectations and forecast uncertainty still observable after four weeks. Our results suggest that combining precise information with a narrative enhances information retention and can lead to more persistent shifts in consumers' beliefs. The effects are strongest when respondents perceive the narrative as relatable and emotionally engaging, and among those with low financial literacy and limited knowledge of inflation. |
| Keywords: | Inflation expectations; central bank communication; narratives |
| JEL: | D84 D91 E31 E58 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:han:dpaper:dp-748 |
| By: | Raza, Hassan; Siddiqui, Danish Ahmed |
| Abstract: | The Objective of this study is to explore a suitable framework of Central Bank Digital Currency for Pakistan according to its unique socio-economic needs through Delphi and Analytical Network Processing Method. This study has used a mixed-method approach combining two distinct techniques to achieve a robust, expert-driven consensus on the design of CBDC for Pakistan. This study consisted of two phases. In the first phase, the modified electronic Delphi Method is used to gather and synthesise the expert opinions about CBDC. In the second phase, ANP is used to model complex relationships and determine the relative importance of different factors that can frame CBDC for Pakistan. The analysis was made through RStudio and Super Decision software. It revealed that the Hybrid CBDC model (64%), having a dual-tiered approach-combining features of both retail and wholesale CBDCs-is optimal for Pakistan, balancing accessibility for the public with institutional efficiency. The study also details designs, challenges, identification of key stakeholders, optimal timeline, regulatory and technological requirements to implement CBDC in Pakistan, according to the socioeconomic needs of Pakistan, based on Expert consensus. This study provides a tailored Framework of CBDC which will address key challenges, like Financial Inclusion, Informal economy and provide opportunities like modernise payment systems, and will also inform policy makers about the practical implications of CBDC. It also provides a clear, expert-validated road map for the State Bank of Pakistan to design and implement the CBDC. |
| Keywords: | Delphi, Analytical Network Process, Central Bank Digital Currency, Financial Inclusion, Payment Efficiency, Financial Stability, Shariah Compliance |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:341063 |
| By: | Suliman, Abdulhameed; Nihar, Samia; Arabi, Zuhair; Omer, Namariq |
| Abstract: | The study examines how digital inclusion shapes the economic empowerment and resilience of women entrepreneurs in Kassala State, Eastern Sudan, using a mixed‑methods design that combines SLMPS 2022 survey analysis with interviews and focus groups. Grounded in a technological capability and inclusive innovation framework, it conceptualizes digital inclusion as meaningful, safe use of technologies for enterprise functions rather than simple access, and constructs a Women’s Economic Empowerment Index (WEEI) to capture empowerment attitudes. Quantitative findings show that education and household wealth are positively associated with empowerment, while age and marriage correlate negatively, and that basic digital access indicators are not robust predictors of empowerment, suggesting that technology alone is insufficient in the absence of key conversion factors such as skills, affordability, and institutional support. Qualitative evidence explains these patterns by revealing widespread “ownership without business use”, with women constrained by high data and device costs; unreliable electricity and connectivity; low digital skills; and gendered norms and reputational fears that limit public-facing online activity, leading them to rely mainly on low-barrier platforms like WhatsApp and Facebook. The study concludes that digital inclusion contributes to women’s economic empowerment in Kassala only conditionally, depending on the interaction between access, individual capabilities, and enabling ecosystem factors, and argues that policy and programme interventions must move beyond access metrics to address these structural and normative constraints. |
| Keywords: | Digital inclusion, women entrepreneurs, economic empowerment, technological capabilities, inclusive innovation, Women's Economic Empowerment Index (WEEI) |
| JEL: | J24 O3 O33 |
| Date: | 2026–02–10 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128011 |
| By: | Khan, Wahaj Ahmed; Siddiqui, Danish Ahmed |
| Abstract: | This paper examines the regulatory and punitive implications of indulgence in money laundering violations and their impact upon global financial connections via de-risking and delinking of financial institutions. Through thematic analysis of some of the most significant enforcement cases, including HSBC, Westpac, Danske Bank, Deutsche Bank, and Westpac, alongside the theory of deterrence and institutionalization, the research examines how financial institutions react to the anti-money laundering (AML) pressure. The study finds that the increasing severity of penalties for compliance, regulatory uncertainty and the risk of a reputational hazard have caused banks to cut off the relationship with their correspondent banks, particularly in regions with high risk and emerging markets. Although these actions are in line with the goals of deterrence to improve compliance. However, they can also lead to financial exclusion through the disruption of remittance flow, trade finance and access to aid for countries such as Nigeria, El Salvador, and Mozambique. The paper suggests that while AML frameworks are vital, a heavy reliance on punitive measures, without reforms that build capacity, could backfire and harm the economies that require the greatest financial integration. It advocates for a balanced regulator who is risk-sensitive, backed with international cooperation and transparency and a spirit of innovation. |
| Keywords: | Anti-Money Laundering, Correspondent Banking, De-linking, Financial Inclusion, Regulatory Penalties, Thematic Analysis |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:341080 |