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on Payment Systems and Financial Technology |
| By: | Asongu, Simplice |
| Abstract: | Using twenty-five policy variables, we investigate determinants of mobile phone/banking in 49 Sub-Saharan African countries with data for the year 2011. The determinants are classified into six policy categories, notably: macroeconomic, business/bank, market-related, knowledge economy, external flows and human development. The empirical evidence is based on contemporary and non-contemporary Quantile regressions. The following implications are relevant to the findings. First, mobile phone penetration is positively correlated with: (i) education, domestic savings, regulation quality and patent applications, especially at low initial levels of mobile penetration; (ii) bank density; (iii) urban population density and (iv) internet penetration. Second, the use of the mobile to pay bills is positively linked with: (i) trade and internet penetration, especially in contemporary specifications and (ii) remittances and patent applications, especially at low initial levels of the dependent variable. Third, using the mobile to send/receive money is positively correlated with: internet penetration and human development, especially in the contemporary specifications. Fourth, mobile banking is positively linked with: (i) trade in contemporary specifications; (ii) remittances and patent applications at low initial levels of the dependent variable and (iii) internet penetration and human development, with contemporary threshold evidence. The policy implications are articulated with incremental policy syndromes. |
| Keywords: | Mobile phones; Mobile banking; Development; Africa |
| JEL: | G20 L96 O11 O33 O55 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70235&r=pay |
| By: | Asongu, Simplice; Tchamyou, Vanessa |
| Abstract: | To the best our knowledge, in the first empirical macroeconomic examination of the nexus between financial intermediation and mobile phones, Asongu employs two conflicting financial system definitions in the assessment of how mobile phones have stimulated financial development in Africa. Within the framework of the dominant International Monetary Fund’s International Financial Statistics (2008) definition, mobile phones are established to be negatively associated with financial intermediary dynamics of depth, activity and size. Conversely, when the previously neglected informal financial sector is integrated into the conception, definition and measurement of the financial system, mobile phones are positively (negatively) correlated with the informal (formal) financial intermediation sector. The empirical evidence is based on 52 African countries. Causality in the established linkages has been confirmed in subsequent studies by the same author. At least three policy implications derive from the findings. First, the role of informal financial intermediation is increasing to the detriment of formal financial mechanisms. Second, in order to capture the positive effect of mobile phones on finance, it is imperative to integrate the missing informal financial sector component into the IMF definition of the financial system. Third, it is a wake-up call for more scholarly research on: (i) macroeconomic financial development implications of mobile phone penetration and (ii) monetary policy instruments in the face of burgeoning ‘mobile phone’-oriented financial intermediation. |
| Keywords: | Banking; Mobile Phones; Shadow Economy; Financial Development; Africa |
| JEL: | E00 G20 L96 O17 O33 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70242&r=pay |
| By: | Davide Forcella; Frédéric Huybrechs |
| Abstract: | There has been growing interest lately in the role of microfinance to support environmental management of micro-enterprises and poor households. Worldwide, the number of green microfinance projects increases, yet there seems to be little discussion on how effective green microfinance is in achieving its environmental goals. This paper aims to position itself in this debate. We look at the first large-scale green microfinance programme for biodiversity conservation: Proyecto CAMBio. It consists of a combination of credits, technical assistance and conditional payments for environmentally friendly agricultural activities (PES). We focus on its implementation in Nicaragua by the microfinance institution FDL and the NGO Nitlapan. We perform an in-depth econometric analysis of a survey we conducted on a sample of 128 rural producers. We assess the clients’ characteristics that influenced the evolution of the environmental value of their farm –as defined by the indicators we used– on a span of five years, and we assess Proyecto CAMBio’s possible role in this evolution. Moreover, we further look into the effectiveness of PES in rewarding environmental betterment. Factors such as the decision to change the main economic activities, or clients’ strategies or opportunities in land accumulationappear to have the strongest influence on the evolution of the environmental value of the clients’ farm. While the project per se, even if carefully implemented in agreement with its guidelines and well performing at financial level, does not appear to have significantly influenced the evolution of the environmental value of the clients’ farm. Moreover, the PES does not seem to reward environmental improvement while instead it rewards the more credit-worthy activities, producers with more access to land and credit and in addition producers that plant fewer trees per hectare. With these results, we underline the importance of the local territorial dynamics and the complexity of the socio-environmental systems against a vision based simply on single economic actors. From our results it appears that green microfinance, without strategic articulation with local actors and broader territorial dynamics, would tend to (indirectly) support preexisting socioeconomic structures and the possibly related environmental degradation processes. We hence call for a more proactive engagement of green microfinance in the territorial dynamics and with local actors with the aim to support more sustainable livelihood trajectories and development pathways. |
| Keywords: | Microfinance; Green Microfinance; Rural Development; Payments for Environmental Services; Agricultural Finance; Ecosystem Services; Biodiversity; Central America; Proyecto CAMBio; Quantitative Analysis |
| JEL: | Q57 Q01 Q12 Q14 Q15 Q23 O13 G21 C01 |
| Date: | 2016–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/228525&r=pay |
| By: | Filipova-Rivers, Magdalena |
| Abstract: | Up until the financial crisis of 2007 - 2009, the global economy was adding an estimated 150 million new consumers of financial services each year. The rates of increase have since slowed down, but the growth continues. Most of the new consumers are in developing and emerging economies, where consumer protection and financial literacy are still in their infancy and where consumers are faced with an array of new financial products despite their relatively low familiarity with financial matters. The level of understanding of financial issues is too low there, with negative consequences for both individuals and economies. The common definition of ‘financial capability’ refers to the ability of consumers to gather, compare and use relevant information in acquiring financial services. Financial education is seen as the key intervention which reduces financial ignorance and improves the consumers’ position on the financial market. Several high-income countries have established national financial capability strategies and many other middle-, and low-income countries have also started implementing such policies. As a result of demographic, economic and policy changes, the needs of both the European citizens and the financial products themselves have grown in complexity. This, coupled with the deregulation and globalisation of the financial markets, poses not only considerable opportunities but also threats for the financial wellbeing of individuals and households. If left unattended, changes in the financial system can also pose a variety of risks to society, which will bear the costs arising from market inefficiency. This further highlights the importance of consumer protection and financial literacy for ensuring confidence in the financial system (which is also relevant for Bulgaria and Romania) and for increasing financial inclusion. In April 2010 the World Bank commissioned two nation-wide surveys of the levels of financial literacy in both Romania and Bulgaria. The main objective of these surveys was the establishment of a well-targeted national program for financial education. The data obtained from the respective surveys form the basis for the comparative study on financial capability and consumer protection in Bulgaria and Romania, which is the focus of this report. The purpose of this paper is to define the main challenges as regards consumer protection in the financial services sector in Bulgaria and Romania. The survey revealed several important problems that need further policy consideration. One main observation is that the financial sector in both Bulgaria and Romania is underutilized; it is comprised mainly of banking services such as debit cards and consumer loans. Outside the banking system only insurance and, to a certain degree, leasing services enjoy popularity. Furthermore, it can be inferred that large proportions of the populations of both countries are not involved in the formal financial sector, whilst those who are, are of relatively low financial literacy. Such tendencies limit individuals’ access to financial services and in turn have economy-wide implications in terms of hampered growth of the sector. The next section (part two) discusses conceptual issues and literature related to financial capability in the broader context. In part three we look at the case for comparison between Bulgaria and Romania. Part four of the study deals with data from the respective surveys conducted in Bulgaria and Romania and seeks to draw parallels between the two countries on the questions of: financial status and money management, financial product usage and trust in institutions, and staying informed. Section five offers a summary of the preceding data discussion before concluding with some country-specific policy recommendations. |
| Keywords: | financial education, indebtedness, consuer protection, financial literacy |
| JEL: | G0 I25 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70130&r=pay |
| By: | Jean-Pierre H. Dubé; Zheng Fang; Nathan Fong; Xueming Luo |
| Abstract: | We conduct a large-scale field experiment to study competitive price discrimination in a duopoly market with two rival movie theaters. The firms use mobile targeting to offer different prices based on location and past consumer activity. A novel feature of our experiment is that we test a range of relative ticket prices from both firms to trace out their respective best-response functions and to assess equilibrium outcomes. We use our experimentally-generated data to estimate a demand model that can be used to predict the consumer choices and corresponding firm best-responses at price levels not included in the test. We find an empirically large return on investment when a single firm unilaterally targets its prices based on the geographic location or historical visit behavior of a mobile customer. However, these returns can be mitigated by competitive interactions whereby both firms simultaneously engage in targeting. In practice, firms typically test only their own prices and do not consider the competitive response of a rival. In our study of movie theaters, competition enhances the returns to behavioral targeting but reduces the returns to geo-targeting. Under geographic targeting, each theater offers a discount in the other rival's local market, toughening price competition. In contrast, under behavioral targeting, the strategic complementarity of prices coupled with the symmetric incentives of the two theaters to raise prices charged to high-recency customers softens price competition. Thus, managers need to consider how competition moderates the profitability of price targeting. Moreover, field experiments that hold the competitor's actions fixed may generate misleading conclusions if the permanent implementation of a tested action would likely elicit a competitive response. |
| JEL: | L1 L11 L13 M31 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22067&r=pay |
| By: | International Monetary Fund. Monetary and Capital Markets Department |
| Abstract: | Moldova has a modern interbank payment system that lies at the heart of its financial markets. The Automated Interbank Payment System (AIPS) settled on average MDL 2 billion (US$ 214 million) per day, or 2.7 percent of GDP in 2013. It has real-time gross settlement features that help reduce systemic risks, settles large-value and time-critical payments, and is interdependent with two securities settlement systems. This includes the central bank’s Book-Entry System (BES) that handles government securities and central bank certificate settlements, and the National Securities Depository (NSD) that settles private sector securities trades. It largely met international standards in the FSAP Update of 2008. A self-assessment of the BES against the CPSS-IOSCO Principles for Financial Market Infrastructures (PFMIs) has been completed in December 2013 by the NBM. The preliminary results suggest full observance with 11 principles and broad observance with three principles (Principle 1 on Legal Basis, Principle 22 on Communication Procedures and Standards). They are currently under the peer review process by the National Commission for Financial Markets (NCFM). |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:16/72&r=pay |
| By: | Jaroslav Bukovina (Department of Finance, Faculty of Business and Economics, Mendel University in Brno); Matus Marticek (Faculty of Business and Economics, Mendel University in Brno) |
| Abstract: | This paper augments the current research suggesting the less rational factors like attractiveness of Bitcoin and speculative investments to be influential for excessive volatility. In particular, it examines the sentiment as a driver of Bitcoin volatility. The paper contributes with economic rationale about a link between sentiment and Bitcoin. Further, the authors propose a unique decomposition of Bitcoin price to rational and less rational components. The paper tests this theoretical prediction with unique sentiment intraday data in the period of 12/12/2013 – 12/31/2015. The findings of the paper show the marginal presence of sentiment during the overall studied period. However, the explanato- ry power of sentiment significantly increases during the period of excessive volatility, especially dur- ing the bubble period at the end of the year 2013 and beginning of 2014. Moreover, the findings show that positive sentiment is more influential for Bitcoin excessive volatility. |
| Keywords: | Bitcoin, volatility, sentiment, Bitcoin bubble |
| JEL: | E49 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:men:wpaper:58_2015&r=pay |