Risk rationing and agricultural credit demand in Kyrgyzstan: Evidence from life in Kyrgyzstan survey

In Sub-Saharan Africa, agricultural insurance products have been piloted to address the connected climatic risks that farmers confront. However, these products, in general, face low rates of adoption in Ghana. Specific determinants and opportunities of weather index-based insurance are evident in the existing literature. However, empirical studies on the effect of the variables in question seem to be lacking. The purpose of this study was to determine whether farmers in Ghana are willing to demand weather index-based insurance and what factors influence crop insurance participation and purchase. The factors under consideration included farmers' trust in financial institutions, farmers' perception of risk, and farmers' perceptions of policy interventions. This study utilized the theory of planned behavior (TPB) to explain the factors that influenced crop farmers' demand for weather index insurance. Based on the objectives of the research, the study adopted the quantitative research approach. In Ghana's Northern and Southern Savanna regions, a purposive sample technique was used to survey two hundred and three (203) farmers. The variables that affected the likelihood of farmers requesting weather index insurance were identified using Ordered Probit econometric models. The empirical results from the crop farmers show that farmers' trust in financial institutions, farmers' perceived risk, and farmers' perception of public policy were significant predictors of weather index insurance demand. The study found that farmers' trust in financial institutions and perceptions of public policy positively affected the probability of demanding weather index-based insurance. On the contrary, farmers' perceived risk negatively affected farmers' likelihood of demanding weather index insurance. The ordered probit regression analysis showed a significant difference between agroecological zone (p-value = 0.020, z = -2.31), maize crop (p-value = 0.022, z = -2.13), farming experience (p-value = 0.038, z = 1.92) and educational background (p-value = 0.042, z = 1.83) in farmer's willingness to demand weather index insurance. The study finds that farmers with a high level of perceived risk are less likely to demand for weather index-based insurance. Also, farmers with a high level of trust are more likely to demand for weather index-based insurance. Finally, farmers who view policy interventions to be effective are more likely to demand extra weather index-based insurance. The findings provide useful insight for government agencies and policymakers to review existing policies and introduce new ones that would encourage the participation of weather index insurance. Also, insurers can take a clue from the findings to draw up effective programs and workshops that would train farmers on better risk management strategies through the adoption of weather index insurance products. The study recommends the government improve the infrastructure and the quality of weather data. The study also suggests future studies to focus on farmers' saving and access to credit facilities on adopting weather index-based insurance. KEYWORDS: Weather Index-Based Insurance, Climate Risk Mitigation, Sustainable Agriculture, Farmer Perceptions, Trust in Financial Institutions

This research aims to investigate the significance of trust in financial institution and financial literacy in the investment decision-making of individual investors during the COVID-19 pandemic and investigates the strength of the theory of planned behavior (TPB) in this framework. This study considered a structured questionnaire to collect data from 460 individual investors of different districts in four states of India. For testing the research hypotheses, SPSS and PLS-SEM were taken into consideration. The findings enlighten that elements of TPB, i.e. attitude (ATT) and subjective norms (SNs), are significantly associated with investment intentions (INT) while perceived behavioral control (PBC) displays an insignificant association with INT. Furthermore, along with the original components of the TPB model, Trust in financial institution (TFI) and Financial Literacy (FL) were also incorporated in the model, which shows a significant affect on investors’ intention to invest in the stock market. The results stated that TFI is the most significant factor that enhances investors’ intention to participate in stock market during COVID-19 pandemic. The study describes that during the phase of uncertainty like COVID-19 pandemic trust is the most important factor that enhances investors’ participation in the stock market. Authors suggest SEBI and other financial institutions should promote trust and trusting behavior in financial institutions as it is significant not only from the perspective of financial development but also to empower the individuals to gain from institutional services as well as to guard them, from possible negative effects (like financial frauds), which are more likely to be present outside of regulatory boundaries. This study is one of the initial attempts in the context of the Indian Stock Market to introduce TFI as a dual (both mediating and moderating) variable between the basic constructs of TPB. Further, the study also examines the importance of trust in financial institution and financial literacy in enhancing investors’ intention to participate in stock market during COVID-19 pandemic.

В современных динамично меняющихся условиях развития российской экономики происходят значительные изменения в финансовом поведении населения, которое является прямым отражением доверия населения финансовым институтам. Исследователями в качестве основных детерминант, влияющих на изменение финансового поведения населения, выделяются объективные и субъективные факторы. К объективным факторам относят сложившиеся в экономике страны данные по таким показателям, как инфляция, ключевая ставка, реальные располагаемые доходы населения, валютный курс национальной валюты, объём денежной массы в стране и др. К субъективным факторам относят внутренние убеждения и ожидания населения относительно развития экономики страны, деятельности финансовых институтов, стремления к финансово грамотному поведению, культурные и иные индивидуальные поведенческие установки актора. Именно субъективные факторы, определяющие доверие или недоверие финансовым институтам в нашей стране, представляют главный интерес в области социального анализа поведения акторов. В статье исследуется доверие граждан финансовым институтам, причины формирования определенного уровня доверия финансовым институтам, а также влияние сформировавшегося уровня доверия населения на социально-экономическое развитие страны. The modern rapidly changing conditions of the development of the Russian economy causes significant changes in the financial behavior of the population, directly reflecting the public's trust in financial institutions. The change in the financial behavior of the population is influenced by many factors, among which researchers distinguish objective and subjective. Objective factors include the level of inflation, interest rates, the state of financial institutions, monetary income, exchange rate, money supply. Subjective factors include the expectation of the population regarding the development of the country's economy, the level of trust in financial institutions, and the desire to accumulate funds. The field of social analysis of the behavior of actors is particularly interested in the subjective factors that determine the level of trust or distrust in financial institutions in Russia. This paper examines the trust of the Russian citizens in financial institutions, the reasons for the formation of a certain level of trust in financial institutions, as well as the impact of the formed level of public confidence on the socio-economic development of the country.

Trust in Financial Institutions: A Survey

Trust in financial institutions is widely considered important. However, a clear overview of studies on the drivers of trust is missing. We intend to fill this gap in the literature. After discussing why trust in financial institutions is important, we turn to its measurement, where we distinguish between trust in one's own institution and trust in institutions in general (narrow‐scope and broad‐scope trust), and discuss how these measures differ from generalized trust (i.e. trust in other people with whom there is no direct relationship). Finally, we survey the determinants of trust in financial institutions and discuss a wide range of drivers. First, trust in financial institutions depends on the economic situation: it behaves procyclically and is negatively affected by financial crises. Second, the behavior of financial institutions matters: prudent conduct, the provision of good services and financial health have a positive effect on trust. Third, although consumer characteristics also relate to trust, many of these relationships are context‐dependent. Fourth, there is a positive association between narrow‐scope trust on the one hand and broad‐scope trust and generalized trust on the other. Last, policy measures and supervisory actions can help prevent loss of trust.

Following the global financial crisis (GFC) of 2008 there was recognition that client trust in financial institutions had been damaged. While institutional trust has become an accepted barometer, less is known about who trusts the banking and finance sector. This paper investigates the individual characteristics associated with trust for the Bank of England (BoE) and high street banks in Britain. Importantly, we consider this question in the context of a point in time, namely 2014. This is an important case study as it is some years after the initial impact of the GFC yet prior to the referendum vote for Britain to exit the European Union (Brexit) and coincides with the Scottish referendum. Our results suggest that the characteristics associated with trust in the BoE differ from those associated with trust in high street banks and other financial institutions. Specifically, older people, more educated people and people residing in London show higher levels of trust in the BoE. In terms of trust in the sector overall, we also find that positive perceptions on the availability of credit are correlated with higher levels of trust.

Trust in financial institutions (ToF) is considered essential for an effective financial system, yet, little has been explored regarding what determines them, particularly in the case of Pakistan. By using World Values Survey data (wave 7), large cross-provincial differences are observed for the trust on banks, which confirmed the influence of several socio-demographic indicators. The findings indicate that men tend to trust banks more than women in most cases and trust in banks tends to increase with income, but not in every province. However, it decreases with age in provinces like Balochistan, and media and internet access bring novel results for the trust in financial institutions. Additionally, trusting religious and political institutions, such as trust in government or civil wars, and economic values may affect the trust in financial institutions too. Therefore, the current study suggests to policymakers that a uniform strategy may not work equally well in boosting trust in financial institutions (ToF) across all provinces of Pakistan. However, media literacy and financial education can be prioritized, particularly in areas with lower educational attainment, which could be instrumental in fostering confidence in banks.

Formal and Informal Household Savings: How Does Trust in Financial Institutions Influence the Choice of Saving Instruments?

PurposeThe purpose of this paper is to investigate the factors influencing Palestinian consumer attitudes toward artificial intelligence (AI)-powered online banking, focusing on performance expectancy, effort expectancy, social influence and facilitating conditions while considering the moderating role of trust in financial institutions.Design/methodology/approachTo test the hypotheses, an empirical study with a questionnaire was carried out. The study was completed by 362 Palestinian customers who use online banking services.FindingsThe findings of this paper show that performance expectancy, effort expectancy, social influence and facilitating conditions significantly influence consumer attitudes toward AI-powered online banking. Furthermore, trust in financial institutions as a moderating variable strengthens the impact of performance expectancy, effort expectancy, social influence and facilitating conditions on consumer attitudes toward AI-powered online banking. Therefore, more studies should focus on certain fields and cultural contexts to get a more thorough grasp of the variables influencing adoption and acceptability.Research limitations/implicationsThe study's findings may be specific to the Palestinian context, limiting generalizability. The reliance on self-reported data and a cross-sectional design may constrain the establishment of causal relationships and the exploration of dynamic attitudes over time. In addition, external factors and technological advancements not captured in the study could influence Palestinian consumer attitudes toward AI-powered online banking.Practical implicationsFinancial institutions can leverage the insights from this research to tailor their strategies for promoting AI-powered online banking, emphasizing factors like perceived security and ease of use. Efforts to build and maintain trust in financial institutions are crucial for fostering positive consumer attitudes toward AI technologies. Policymakers can use these findings to inform regulations and initiatives that support the responsible adoption of AI in the financial sector, ensuring a more widespread and effective implementation of these technologies.Originality/valueThis research delves into Palestinian consumer attitudes toward AI-powered online banking, focusing on trust in financial institutions. It aims to enrich literature by exploring this under-explored area with meticulous examination, robust methodology and insightful analysis. The study embarks on a novel journey into uncharted terrain, seeking to unearth unique insights that enrich the existing literature landscape. Its findings offer valuable insights for academia and practitioners, enhancing understanding of AI adoption in Palestine and guiding strategic decisions for financial institutions operating in the region.

Based on analysis of 14 years of data on Dutch consumers' trust in financial institutions, we find that financially literate consumers are more likely to trust banks, insurance companies and pension funds. This result applies both to broad‐scope trust (trust in financial institutions in general) and narrow‐scope trust (trust in one's own financial institution). Our conclusion holds when we use a financial literacy proxy based on self‐assessed knowledge or a proxy based on actual knowledge. For all types of financial institutions researched, we find that narrow‐scope trust is significantly higher than broad‐scope trust, but both forms of trust are positively related. Financially knowledgeable people are more likely to trust managers of financial institutions and have more trust in the prudential supervisory authority. Finally, our results suggest that trust in the supervisory authority positively correlates with trust in the financial sector.

This study examines how social norms (SNs) influence trust in financial institutions and shape economic behavior in Ethiopia, where informal institutions such as Equb and Edir coexist with modern banking and insurance systems. This research addresses two key questions: (1) How do social norms affect economic behaviors, such as saving, investment, and institutional trust? (2) What lessons can formal financial institutions learn from the traditional economic structures? Using a mixed-methods approach, this study draws on World Values Survey (WVS) Wave 7 data (n = 1230) and 98 key informant interviews from seven Ethiopian cities. Quantitative data were analyzed using descriptive statistics, chi-square tests, and thematic coding of qualitative interviews. Findings indicate that 78.5% of respondents are “confirmatory,” meaning they adhere closely to prevailing social norms, while 21.5% are “non-confirmatory,” demonstrating a greater willingness to deviate from societal expectations. While economic satisfaction did not significantly differ between groups (p = 0.812), confirmatory individuals exhibited lower trust in the government (64.5%) and major banks (69.2%) than non-confirmatory individuals (72.6% and 76.5%, respectively; p = 0.015, p = 0.04). Additionally, qualitative insights reveal that confirmatory individuals hold stronger reservations toward wealth accumulation and savings, which may have implications for financial decision making. To improve financial inclusion and institutional trust, policymakers should integrate trust-building mechanisms from informal institutions, increase financial literacy, and develop more flexible banking services. Recognizing the effectiveness of Equb and Edir, formal financial institutions should adopt community-driven approaches to enhance their accessibility, reliability, and participation.

The purpose of the study is to examine financial literacy, risk tolerance, job satisfaction and trust in financial institutions on personal investment behaviours among investment company employees in Shanghai, China. Data from a total of 324 respondents were collected from personal investment company using survey. The results of multiple regressions demonstrate that financial literacy, risk tolerance, job satisfaction, and trust in financial institutions have significant predictive power in explaining variations in personal investment behaviours among investment company employees in Shanghai, China. Trust in financial institutions stands out as the most potent predictor in the model followed by risk tolerance, financial literacy and job satisfaction. These results confirm existing literature but add a layer of complexity by focusing on employees in the financial sector. The strong correlation indicates that even those with inside industry knowledge place high value on trust. The emotional assurance stemming from trust appears to act as a foundational pillar for making investment decisions, especially in a bustling financial hub like Shanghai. It seems that trust mitigates the inherent risks of investments, leading to more confident decision-making.

Financial Knowledge and Trust in Financial Institutions

This article examines the effect of financial trust on the demand for financial advice in Singapore. Using a general population sample, we study how consumers’ trust in financial institutions impacts both their advice-seeking and advice-adopting behaviors. Only 4 in 10 respondents state that they usually seek (or adopt) advice from a financial advisor before investing their savings. We find that financial trust is a strong predictor of both behavioral outcomes, even after accounting for endogeneity and a number of covariates. Furthermore, the estimated effect of financial trust on adopt advice is larger than that on seek advice. These results are robust to variations in empirical specifications. Results also reveal that education is positively associated with the demand for financial advice, while ethnic minorities are less inclined to seek or adopt professional advice. Our findings underscore the importance of enhancing consumers’ trust in financial institutions as a means to further develop the financial services sector and financial advice markets.

Who Trusts the Bank of England and High Street Banks in Britain?