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on Financial Literacy and Education |
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Issue of 2025–11–17
eight papers chosen by Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca |
| By: | Villalba, Roberto; Venus, Terese E.; Trappmann, Juliana; Sauer, Johannes |
| Abstract: | In the Global South, smallholder farmers are among the most financially excluded groups and appropriate indicators are essential to develop targeted support mechanisms. As financial inclusion is a complex and multidimensional phenomenon, we design a framework to link the concepts of access and usage of financial services and propose the Smallholder Financial Inclusion Index (SFI). We use Multiple Correspondence Analysis to identify 12 relevant indicators to measure financial inclusion and calculate weights. To demonstrate the applicability of the index, we use data from smallholders in Bangladesh, Uganda, Tanzania, Nigeria, and Ivory Coast to compare household, regional, and national financial inclusion. The results show Uganda has the highest SFI score at 35.45, followed by Bangladesh at 31.85, Tanzania at 22.49, Nigeria at 17.49, and Ivory Coast at 11.28. This index can be disaggregated to regional levels, allowing policymakers to identify vulnerable parts of the country and their specific financial needs (e.g., using bank accounts for saving and acquiring loans). For example, in Nigeria, farmers in the coastal regions report access to savings almost twice as large as in the central region. Lastly, we estimate a censored regression model using the household scores to understand factors driving household financial inclusion. We find that information channels are significantly associated with financial inclusion. The proposed index shows that a detailed understanding of financial inclusion can support policymakers in targeting excluded groups at the household and regional levels. |
| Keywords: | Agricultural Finance, Consumer/Household Economics |
| URL: | https://d.repec.org/n?u=RePEc:ags:aes024:355342 |
| By: | Vishaal Baulkaran; Pawan Jain |
| Abstract: | Financial literacy allows financial planners to provide unbiased and relevant recommendations to their clients as well as help them to mitigate clients’ behavioral biases. By recognizing clients’ behavioral biases, financial planners can take steps to mitigate their effects and make more rational and effective decisions (Barber and Odean, 2000; Shefrin and Statman, 1985; Huberman, 2001, Baulkaran and Jain, 2024). Financial planners’ ability to mitigate clients’ behavioral biases will likely increase with a greater degree of financial literacy. Financial literacy in the context of home equity release schemes refers to the planner's ability to understand the nuances of these products, assess their suitability for different client profiles, and communicate the associated risks and benefits effectively to clients (Baulkaran and Jain, 2024 and Baulkaran and Jain, 2023). Baulkaran and Jain (2024) highlights that while financial planners are generally knowledgeable, they may still fall prey to behavioral biases that can influence their recommendations. Given that financial literacy is paramount in financial planning and advising services, we examine financial planners’ knowledge of home equity release options. We show that financial planners’ total financial literacy score across different home equity release options is 64%, with the 75th percentile score being approximately 79%. Financial planners appeared to underestimate their knowledge. For example, 54% of planners rank their knowledge of reverse mortgages as very high to extremely high compared to an average score of 60% for reverse mortgage questions. Using Tobit regression, we show that several demographic characteristics explain financial literacy total scores as well as reverse mortgage scores. Also, we show that financial planners with high overconfidence bias scored less on the literacy questions. Finally, the planners specializing in retirement planning tend to have a high literacy score. |
| Keywords: | Financial Literacy, ; Financial Planners, ; Home Equity |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_236 |
| By: | Chao Lin |
| Abstract: | The mortgage right of rural real estate (RRE) is one of the legal and important property rights of the peasants, which is prohibited to be mortgaged because of rural housing land institute in China. In reality the financial demand of the peasants is huge in rural area, which need more invest into personal consumption, agriculture upgrading. So the central government starts the pilot reform of mortgage load of rural real estate, which is beneficial to activate the land asset, increase the financing channel, promoting the strategy of rural revitalization. It is found in previous literature that the level of financial literacy of farmers significantly affects the borrowing behavior. However, it is still unclear whether the financial literacy will also significantly affect the mortgage behavior of RRE and what the influencing mechanism is. The paper applies Logit regression model and regulatory effect model to reveal the influence mechanism of farmers' financial literacy on the mortgage loan of RRE based on data from Yongfeng pilot, and finds that: (1) The financial literacy of farmers has a significant positive impact on the participation behavior of RRE mortgage. The higher of the financial literacy of farmers, the more comprehensive the understanding of RRE mortgage, the more likely they are to participate in RRE mortgage; (2) Among the constituent factors of financial literacy, financial attention has the greatest impact on the mortgage, followed by risk identification ability, but the negative effect of financial ability is not significant. (3) The degree of homestead dependence of farmers plays a moderating role. The lower the homestead dependence of farmers, the more positive influence of financial literacy on the participation behavior of mortgage. Because farmers with low homestead dependence have less ""worries"" for mortgage, are more willing to apply for RRE mortgage. (4) Heterogeneity analysis show that the financial literacy has significantly influence on peasants owning urban house, but not for peasants without urban house |
| Keywords: | Financial literacy; Mortgage load; Rural homestead; Rural real estate |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_126 |
| By: | Lee, I.; Lléo-Bono, A.; Rauh, C.; Tipoe, E. |
| Abstract: | This paper examines whether increasing individuals' awareness of their own confidence can influence financial behaviour. In a pre-registered online experiment with nearly 3, 000 U.S. adults, we test the effects of a novel metacognitive intervention: personalised feedback on implicit confidence about one's financial abilities, as measured by a custom Implicit Association Test (IAT), paired with an explanation of the importance of self-confidence in financial abilities. Treated participants show a significant reduction in "don't know" responses on financial literacy tests and their performance in an incentivised investment task significantly improves: treated participants are less likely to make clearly dominated choices, more likely to select efficient allocations, and choose portfolios closer to the efficient frontier. These effects persist two weeks later in a follow-up survey with obfuscated framing. Heterogeneity analyses show stronger effects for females and for participants who understate their confidence (i.e. whose reported confidence is lower than what their IAT suggests). |
| Keywords: | Confidence, Confidence Awareness, Personal Finance, Financial Literacy, Survey Experiment |
| JEL: | D14 D83 D91 G11 G53 |
| Date: | 2025–10–14 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camjip:2527 |
| By: | Jon Frost; Jean-Charles Rochet; Hyun Song Shin; Marianne Verdier |
| Abstract: | We compare three competing digital payment instruments: bank deposits, digital platform tokens and central bank digital currencies (CBDCs). A simple theoretical model integrates the theory of two-sided markets and payment economics. We use the model to assess the impact of a public option such as a fast payment system that makes private payment instruments interoperable, or a CBDC that provides general access to public digital money. We show that both options are essentially equivalent for the industrial organisation of the payment system. We find that, even if they may lead to some degree of disintermediation, both options can contribute to increasing financial inclusion and improving social welfare. |
| Keywords: | payments, CBDC, fast payments, banks, big tech, platforms |
| JEL: | E42 E58 G21 L51 O31 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:bis:biswps:1301 |
| By: | Sya In Chzhen (School of Economics, University of East Anglia) |
| Abstract: | This study investigates the global drivers for the adoption and usage of digital financial services (DFS) using three waves of repeated cross-sectional data from 160 countries, exploiting a pooled logit regression and the Heckman selection model. We predict the impact of proxies of digital nancial services, including mobile money account ownership, mobile or internet transactions, as well as the ownership and usage of credit and debit cards, into the adoption and usage of digital fi nancial services. While con rming ndings from existing literature, our fi ndings highlight several original insights. We fi nd that the diffusion of informal digital fi nancial services begins in countries with negative net migration, whereas the di usion of formal digital fi nancial services begins in countries with positive net migration. Population density is an adverse driver of adoption and usage of informal digital financial services, and of the transition from adopting to using debit cards. The historical level of digital infrastructure has a strong legacy e ect on the usage of digital fi nancial services, at both extensive and intensive margins. Population density is an adverse driver of adoption and usage of informal digital financial services and debit cards, as well as the transition from adopting to using debit cards. This study offers guidance to policymakers and other stakeholders by identifying the global determinants of both adoption and usage of formal and informal digital financial services, independent of market-speci c contexts, and the key determinants influencing the transition from adoption to e ective usage of speci c digital fi nancial services tools. |
| Keywords: | Digital nance; Financial inclusion; Technological di usion; ROC |
| JEL: | C35 G21 O33 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:uea:ueaeco:2025-03 |
| By: | Dairo Estrada; Clark Granger; Valeria Salas; Jhuliana Sofía Segura |
| Abstract: | Este documento analiza el funcionamiento del sistema de crédito agropecuario en el país con énfasis en el acceso al financiamiento por parte del pequeño productor, quien representa una proporción significativa de la producción y de la población rural. Se examinan las características del Sistema Nacional de Crédito Agropecuario (SNCA), la evolución reciente de los desembolsos de créditos del sector utilizando información de FINAGRO, los costos enfrentados por los intermediarios financieros y las restricciones de oferta y demanda que limitan el acceso al crédito formal. Adicionalmente, se presenta un análisis econométrico que identifica posibles determinantes del acceso al crédito rural. Se encuentra que las condiciones geográficas y de infraestructura en Colombia limitan el acceso de pequeños productores agropecuarios al crédito, generando una concentración de colocaciones en la Región Andina. Esta distribución refleja desigualdades estructurales relacionadas con densidad poblacional, acceso a servicios, capacitación y rentabilidad productiva. En general, se evidencia la necesidad de ajustes en las políticas de fomento para mejorar la inclusión financiera del pequeño productor agropecuario. **** ABSTRACT: This document analyzes the functioning of the agricultural credit system in Colombia, with emphasis on access to financing for small-scale producers, who represent a significant share of both agricultural output and the rural population. It examines the characteristics of the National Agricultural Credit System (SNCA), the recent evolution of credit disbursements in the sector using data from FINAGRO, the costs faced by financial intermediaries, and the supply and demand constraints that limit access to formal credit. Additionally, it presents an econometric analysis that identifies potential determinants of rural credit access. The findings suggest that Colombia’s geographic and infrastructure conditions restrict small agricultural producers’ access to credit, resulting in a concentration of credit placements in the Andean Region. This distribution reflects structural inequalities related to population density, access to services, training, and productive profitability. Overall, the analysis highlights the need for adjustments in development policies to improve financial inclusion for small-scale agricultural producers. |
| Keywords: | Crédito agropecuario, pequeño productor rural, inclusión financiera, agricultural credit, small rural producer, financial inclusion |
| JEL: | Q14 G21 O18 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:bdr:region:337 |
| By: | Miguel Sarmiento-Paipilla; Andrés Esteban Casas-Fajardo; John Sebastian Tobar-Cruz; Eduardo Yanquen |
| Abstract: | This paper analyzes the impact of microcredit on the transition to credit lines in the rural sector. Using administrative data, we find that borrowers entering the subsidized credit market through microcredit programs transition to credit lines with higher loan volumes, lower interest rates, and longer maturities relative to borrowers who enter this market directly. Our results suggest that by reducing asymmetries of information —through both credit history and asset accumulation— microcredit expansion via public policy promotes the transition of new borrowers to credit markets dominated by large borrowers. *****RESUMEN: Este documento analiza el impacto del microcrédito en la transición hacia líneas de crédito en el sector rural. Utilizando datos administrativos, encontramos que los prestatarios que ingresan al mercado de crédito subsidiado a través de programas de microcrédito transitan hacia líneas de crédito con mayores montos, menores tasas de interés y plazos más largos en comparación con aquellos que acceden directamente a este mercado. Nuestros resultados sugieren que, al reducir las asimetrías de información —tanto mediante la construcción de historial crediticio como a través de la acumulación de activos—, la expansión del microcrédito impulsada por políticas públicas facilita la transición de nuevos prestatarios hacia mercados de crédito dominados por grandes actores. |
| Keywords: | Asymmetric information, microfinance, financial inclusion, rural credit, Información asimétrica, microfinanzas, inclusión financiera, crédito rural |
| JEL: | G21 O12 O54 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:bdr:borrec:1328 |