|
on Microfinance |
| By: | Arvind Ashta |
| Abstract: | Artificial intelligence (AI) is emerging as a transformative force in microfinance and financial inclusion, addressing long-standing barriers such as credit invisibility, high operational costs, and limited access to formal financial services. This paper systematically examines AI applications across key financial domains (payments, savings, lending, insurance, investments) highlighting how machine learning, natural language processing, and generative AI are enabling innovative solutions tailored to the needs of marginalized populations. Drawing on contemporary research and case studies from the Global South, the analysis demonstrates AI’s potential to democratize financial services through alternative credit scoring, automated underwriting, and adaptive tools. However, the deployment of AI also presents significant challenges, including algorithmic bias, proxy discrimination, privacy violations, and the risk of exacerbating digital divides. The paper underscores the need for robust governance frameworks, ethical oversight, and inclusive policies to mitigate these risks and ensure that AI-driven financial inclusion serves the most vulnerable without creating new forms of exclusion. Future directions include advancing fairness-aware AI, improving transparency, and fostering cross-sector collaboration to align technological innovation with social justice and human dignity. |
| Keywords: | Artificial Intelligence; Microfinance; Financial Inclusion; Machine Learning; Alternative Credit Scoring; Algorithmic Bias; Digital Divide; Ethical AI; Global South |
| JEL: | G21 G23 O16 O33 D81 I25 C45 C55 |
| Date: | 2026–06–05 |
| URL: | https://d.repec.org/n?u=RePEc:sol:wpaper:2013/408010 |
| By: | DIAKITE, Nanamoudou; DIALLO, Ibrahima; SENE, Omar; SENE, Babacar |
| Abstract: | This paper examines whether mobile money reduces gender gaps in financial autonomy across six Sahelian countries using Afrobarometer Round 9 data (2021-2023, N=6, 540). Instrumenting adoption with distance to traditional financial services, we find pronounced heterogeneity: mobile money increases women's autonomy by 11 percentage points in Senegal (26% gap reduction) and 16 points in Sudan (38% reduction), with no detectable effects in four other countries. This variation correlates with ecosystem maturity, agent density, and regulatory quality. Mechanisms include transactional discretion, informal credit access, and enhanced security. Transformative impacts require 10-14 years ecosystem maturation and agent density above 1 per 2, 000 inhabitants. Digital finance advances women's empowerment only under specific institutional conditions. |
| Keywords: | Mobile money; Gender; Financial inclusion; Instrumental variables; Sub-Saharan Africa; Sahel; Women empowerment; Heterogeneous effects |
| JEL: | G21 J16 O33 O55 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:129244 |
| By: | Ozili, Peterson K |
| Abstract: | This article explores financial inclusion and the increase in formal account inactivity. It examines the formal account inactivity problem, how it delays the benefits of financial inclusion, the risks posed by formal account inactivity and solutions to reduce formal account inactivity. It was argued that countries with a high level of financial inclusion, in terms of formal account ownership, will reap the benefits that accompany financial inclusion which includes poverty reduction, stimulating entrepreneurship, increased financial security, reduced economic inequality, improved wellbeing and increased economic growth. However, these benefits may not be realized if there is an increasing number of inactive formal accounts. |
| Keywords: | financial inclusion, inactive formal accounts, account inactivity, digital financial inclusion, mobile money account, bank account, risk, dormant account |
| JEL: | G20 G21 G23 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128973 |