Differences in financial inclusion by disability type

Abstract

PurposeThe purpose of this study is to determine the nature of financial inclusion for individuals with various types of disabilities.Design/methodology/approachData from 2015, 2017 and 2019 FDIC Survey of Household Use of Banking and Financial Services was pooled, and binary logistic regressions were used to investigate differences in barriers to financial inclusion (e.g. unbanked) between people with different types of disabilities (e.g. cognitive) and those without such disabilities.FindingsUsing five separate barrier measures, the authors found specific disability types face different barriers to financial inclusion. For example, respondents with cognitive, ambulatory or two or more disabilities were more likely to use nonbank transaction products and alternative financial services. And, those with vision or cognitive disabilities were more likely to be denied or receive reduced credit. When examining aggregate barriers to financial inclusion (total number of barriers faced) respondents with cognitive, ambulatory, hearing or two or more disabilities experienced the lowest degree of financial inclusion in the authors’ dataset.Research limitations/implicationsCausal inference cannot be made due to the cross-sectional nature of the data. The data only covers the US population, and the measurement of disability type could include those with short-term impairments. Further, there may be an omitted variable bias.Practical implicationsBest practices to maximize financial inclusion for those with different disability types should address accessibility issues, bank staff education, financial literacy education and poverty issues. Additional government policies and oversight are also needed to protect and enhance the overall financial inclusion of people with disabilities.Originality/valueTo the best of the authors’ knowledge, this paper is the first to examine the relationship between various barriers to financial inclusion and aggregate barriers to financial inclusion by disability type. Specific disability types are found to face different barriers to financial inclusion.