The Complementary Effects of Financial Education and Payday Lending Regulations on Financial Inclusion

This study explores the critical relationship between financial inclusion and financial literacy, highlighting their roles in fostering economic development and reducing inequality. Financial inclusion refers to the availability and accessibility of financial services to all individuals, regardless of their socio-economic status. Financial literacy, on the other hand, is the knowledge and understanding of financial concepts that enable individuals to make informed and effective financial decisions. This paper investigates how financial literacy impacts financial inclusion, examining the barriers to inclusion that low financial literacy may create. By analyzing data from various demographic groups, the study reveals a positive correlation between financial literacy and financial inclusion, suggesting that improving financial literacy can significantly enhance financial inclusion. The findings underscore the importance of targeted educational initiatives and policy interventions aimed at increasing financial literacy as a means to achieve broader financial inclusion. Financial inclusion and financial literacy are two interconnected pillars essential for achieving sustainable economic growth and reducing poverty. In an increasingly complex financial world, access to financial services and the ability to use them effectively are crucial for individual and societal well-being. Financial inclusion ensures that individuals have access to basic financial services such as savings, credit, insurance, and payment systems, which are fundamental to participating fully in the economy. However, access alone is not sufficient. Without a basic understanding of financial concepts—such as interest rates, inflation, and investment risks—individuals may struggle to make informed financial decisions. This gap in financial literacy can lead to suboptimal use of financial services, perpetuating cycles of poverty and economic exclusion. This paper seeks to explore the dynamic relationship between financial literacy and financial inclusion, focusing on how enhancing financial literacy can lead to greater financial inclusion. The study also considers the role of policymakers, financial institutions, and educational bodies in fostering environments where both financial literacy and inclusion can thrive. Understanding the relationship between financial inclusion and financial literacy is critical for advancing economic development and reducing poverty. Financial inclusion plays a crucial role in enabling individuals to participate fully in the economy, while financial literacy equips them with the necessary skills to make informed decisions about their financial resources. Despite global efforts to enhance financial inclusion, millions of people, particularly in developing countries, remain excluded from the formal financial system. This exclusion is often exacerbated by low levels of financial literacy, which prevents individuals from effectively using available financial services. The significance of this research lies in its potential to inform policymakers, educators, and financial institutions about the importance of integrating financial literacy programs with financial inclusion strategies. By demonstrating the impact of financial literacy on financial inclusion, this study underscores the need for targeted interventions that address both access to financial services and the ability to use them wisely. Benefit 1: Accessibility (0-10), Benefit 2: Impact on Savings (0-10), Non-Benefit 1: Implementation Cost (USD thousands), Non-Benefit 2: Complexity (0-10). Mobile Banking, Financial Literacy Workshops, Microfinance Programs, School-based Financial Education, Government Subsidized Savings Accounts. The results indicate that Financial Literacy Workshops achieved the highest rank, while Microfinance Programs had the lowest rank being attained. The value of the dataset for Corporate financial inclusion and financial literacy according to the WASPAS Method, Integrated Pest Management achieves the highest ranking “.

This paper explores the correspondence between financial literacy, financial education, and financial inclusion, as well as the impact these interdependent concepts have on economic and social development. The research was structured into three main stages: a theoretical analysis of the concepts, quantitative research for testing the formulated hypotheses, and qualitative research to deepen the understanding of perceptions regarding the studied phenomenon. The results highlight that financial literacy provides the necessary foundations for individuals to understand basic financial concepts and make informed financial decisions. Financial education extends this understanding by developing advanced financial skills that enable individuals to apply financial concepts in complex contexts. Similarly, financial inclusion relies on financial literacy and financial education to ensure equitable access to financial services and to support the full integration of all individuals into the financial system. Thus, financial literacy, financial education, and financial inclusion are three fundamental, closely interconnected concepts that play an essential role in improving the economic well-being of individuals and society. While financial literacy forms the basis of the essential knowledge required for financial management, financial education builds upon this knowledge and develops advanced financial skills. Financial inclusion is a direct outcome of these processes, ensuring fair access to financial services and promoting a more balanced and sustainable economic system. The study emphasizes the importance of integrating these dimensions into public policies and sustainable development strategies.

The paper is aimed at examining the link between financial literacy and financial inclusion in the presence of social interaction. An established theoretical framework was used, and tested questionnaire was employed to test the hypotheses and data collection. Smart PLS was used as the data is primary in nature. The model is a considered to be a strong model as the effect size is 0.76. Results show that behaviour and knowledge contribute to have an impact on financial inclusion while skills and attitude do not significantly influence, which implies a significant positive influence of financial literacy on financial inclusion. Also, it was found that social interaction moderates the relationship between financial literacy and inclusion as hypothesized in the study. These results imply that in order to improve knowledge and understanding of financial ideas and practises, policy makers, financial institutions, and groups working on financial inclusion projects should concentrate on offering financial education and literacy programmes. Also, tailored interventions must be considered by the policymakers and organizations that combine financial literacy programs with opportunities for social interaction. These interventions could involve interactive workshops, community-based financial education initiatives, and social platforms that facilitate knowledge sharing and peer support.

Purpose The purpose of this article is to demonstrate how artificial intelligence (AI) enables financial education and inclusion for Indigenous communities in Peru. Design/methodology/approach An analysis of the context of AI in the field of financial education and inclusion in Peru was conducted. Subsequently, the study highlighted the case of the digital tool Illariy, which uses AI to educate on savings habits and financial products in Indigenous languages (Quechua, Aymara and Shipibo-Konibo). Finally, the contributions of AI to financial inclusion for Peruvian Indigenous communities were reflected upon. Findings The study evidenced that AI can reduce linguistic and cultural barriers by promoting financial inclusion for Peru’s Indigenous communities. Illariy, an avatar developed in the Quechua language, enables the preservation and valorization of cultural traditions, fostering trust in the financial system. Additionally, the importance of integrating enabling tools to disseminate information in Indigenous languages and revitalize endangered languages is highlighted. Practical implications The use of AI allows for the preservation of Indigenous languages spoken by financially marginalized groups. It also facilitates the dissemination and communication of financial information in Indigenous languages. Originality/value This article addresses a scarcely explored context within Peruvian Indigenous communities, emphasizing the contributions that AI can make to financial education and inclusion.

Purpose: This study aims to determine the magnitude of the influence of financial management, financial literacy and financial inclusion on the financial performance of MSMEs in Jepara Regency. Methodology: This research uses a quantitative approach with a sampling technique, namely purposive sampling. The sample in the study was 113 MSME respondents in Jepara Regency. Technical data analysis using the IBM SPSS Statistics 25 program. Results: The analysis revealed that financial management had no significant effect on financial performance (β = 0.104, p = 0.378). In contrast, financial literacy (β = 0.354, p = 0.002) and financial inclusion (β = 0.277, p = 0.012) had a significant positive effect. The overall model explained 20.7% of the variance in financial performance (Adjusted R² = 0.207, F = 10.763, p 0.05). Findings: Ease of access to financial services and good financial understanding can improve the financial performance of MSMEs. Novelty and Originality: While prior studies have explored the effects of financial literacy and inclusion in various regions, limited research focuses specifically on Central Java, particularly Jepara Regency. This study addresses that gap by providing empirical evidence that highlights the importance of financial literacy and inclusion in improving MSME competitiveness. Conclusion: Improving financial literacy and inclusive access to financial services is a key strategy for enhancing MSME financial performance. This study also recommends that local governments and financial institutions design practical financial education programs and simplify service access to better support MSMEs’ financial growth and resilience. Type of Paper: Research paper.

Objective: The objective of this study is to analyze the importance of effective management of financial inclusion and education in the context of sustainable development, highlighting its impact on the achievement of the SDGs. It also aims to identify the main challenges faced by vulnerable populations in accessing financial services and propose comprehensive strategies to improve financial literacy and accessibility, contributing to a more inclusive and equitable society. Theoretical Framework: For this research we have several relevant approaches and theories such as: financial inclusion theory; its relationship with the SDGs; financial education theory, as well as inclusion and sustainable development. Method: The methodology adopted for this research comprises a qualitative approach, based on the review of documents, public policies and government programs on financial inclusion and education to assess their effectiveness with respect to the SDGs. Data from the World Bank's Data Dashboard (The Global Findex Database, 2024) was analyzed using content analysis, which allowed identifying key themes and gaining a deeper understanding of the perceptions and experiences related to the evaluated programs.. Results and Discussion:The results obtained revealed that, although there is progress in financial inclusion in Mexico, there are still areas of opportunity to improve access to and use of financial services, especially among the most vulnerable segments of the population. It is necessary to highlight the need to continue working on the promotion of financial inclusion in Mexico and in other regions, through public policies that promote financial education, technological innovation, and collaboration between the public and private sectors. Research Implications: The practical implications of this research include the improvement of public policies and programs focused on financial inclusion and education, promoting more equitable access to financial services in vulnerable populations. At a theoretical level, the study provides a deeper understanding of the relationship between financial management and sustainable development, offering a conceptual framework that links financial inclusion with the SDGs. This strengthens the academic analysis on how financial education can drive inclusive economic growth. Originality/Value: The originality and value of this research lies in its focus on the direct relationship between financial inclusion and financial education with the SDGs, an area underdeveloped in the literature. The research offers a new perspective by assessing how financial education can be a key tool for achieving equitable and sustainable development. Its contribution to the literature is in providing a detailed analysis of public policies and government programs, highlighting their effectiveness and identifying areas for improvement, which brings a comprehensive and updated approach to the study of financial inclusion.

This article examines Islamic financial literacy and inclusion in advancing the green economy. The purpose of this article is to find out how Islamic financial literacy and inclusion advance the green economy. The method of writing the article uses a qualitative approach, the type of article is a literature research, data sources are obtained from several books and other sources such as journals related to the study of this article. The results of this study are: Financial inclusion that is useful for increasing financial access for the Indonesian people is one way to overcome various causes of low financial literacy. This statement is in accordance with the plan of the Indonesian National Financial Survey which has included pillars regarding financial education with the aim of developing financial goods and services. Through the use of financial products, the availability of financial services, especially those on a micro scale, can help lower-middle-class people improve their quality of life.

This study employs bibliometric and visualisation techniques to analyse global trends in financial inclusion and the innovative tools that promote it. By examining a multi-database compilation of 4202 documents sourced from Scopus and Web of Science, the significant role of book chapters in disseminating research in this field is highlighted. Our analysis reveals rapid growth in publications, particularly from China and India, and identifies key influential works and authors. Additionally, it is observed that financial inclusion is approached from a multidisciplinary perspective. The findings of this study also indicate a shift in research focus from traditional concepts such as “housing” and “banking” to “digitalisation” and “sustainability.” Key research trends in financial innovative tools include regulatory frameworks, mobile money, and financial education. The issues discussed in this article seek to contribute to the ongoing dialogue on developing intellectual frameworks withing the financial inclusion literature. They offer valuable insights for policymakers, industry practitioners, and researchers in the fields of financial innovation and inclusion.

Due to South Africa’s high unemployment rate and large uneducated population, consumers’ low savings levels and high debt levels are of concern. Previous South African research in the domain of financial behaviour focused only on the population’s debt and savings behaviour and the statistics thereof. There is little research on identifying solutions to poor debt and savings behaviour, as well as improvements in financial literacy and behaviour. As it is essential to improve consumers’ financial literacy, increase their financial inclusion and change their financial behaviour to their financial benefit, it is important to investigate the relationships between these financial aspects. This exploratory study investigates aspects relating to financial literacy, financial inclusion and financial behaviour, specifically among black consumers in Nelson Mandela Bay. A total of 335 black consumers were respondents in an empirical investigation. The main results showed that saving and responsible spending behaviours can be improved as consumers’ financial knowledge and inclusion increase. Based on the results, the article presents conclusions and recommendations regarding the financial education necessary to improve aspects relating to financial literacy, financial inclusion and financial behaviour.

Poverty is one of the main challenges of the contemporary world. The Covid-19 pandemic has worsened the already slow pace of poverty reduction around the world. Some countries have managed to avoid the further growth of poverty, while others failed to overcome the problem. The troubles caused by the pandemic were also added to those caused by Russia-Ukraine war. If this trend continues, millions of people will still live in poverty in the future. The governments of almost all the countries, including Georgia, are actively taking various steps to reduce poverty, inter alia, largely by strengthening financial inclusion and financial education. Lack of financial inclusion is a challenge for low- and middle-income countries, which leaves millions without access to formal financial services. Another important barrier to overcoming poverty is the lack of financial education, one of the most important life skills for everyone. Without understanding basic financial concepts, it is quite difficult to make correct decision. Differences in financial education may affect wealth, inequality and poverty. The presented paper studies the impact of financial education and inclusion on poverty in Georgia based on the processing and analysis of secondary data, academic works, and reports of various international and local organizations.

This study investigates the financial literacy and inclusion of Ghanaian migrants in the UK, focusing on demographic impacts on financial behaviors. Analyzing data from 400 structured survey respondents through descriptive statistics, correlation analysis, and logistic regression, the research finds that most Ghanaian migrants in the UK are younger, unmarried males with less than a university education. Educational attainment emerges as a significant predictor of financial asset ownership, with higher education levels correlating with ownership of savings accounts, investments, and pensions. Marital status also influences financial behaviors, with married individuals exhibiting different financial patterns than singles. Correlation analysis reveals a positive relationship between the length of stay in the UK, age, financial inclusion, and literacy, indicating that longer residency is linked to better financial integration and literacy. Older migrants tend to have larger households and higher financial engagement and literacy. The study provides empirical data on the financial behaviors of Ghanaian migrants in the UK, underscoring the need for financial literacy and inclusion for socio-economic integration. Recommendations include targeted educational programs for younger, unmarried Ghanaian males, and support services for new migrants to navigate the UK’s financial system, aiming to promote economic empowerment and integration within the migrant community.

PurposeThe main objective of this paper is to examine how short- and long-term dynamics can be promoted through economic growth policies, financial inclusion initiatives, institutions and ICT infrastructure development. The study focuses on West African Economic and Monetary Union (WAEMU) member countries over for the period 2000–2020 and the empirical evidence is based on the autoregressive distributed lag (ARDL) method. Our empirical results show that the synthetic index variables of financial inclusion, ICT infrastructure development and individual or composite governance institutions indicators are positively and significantly interrelated in both the short and long runs. A dynamic combination of variables is essential for WAEMU countries to achieve long-term economic development. Policy implications are discussed.Design/methodology/approachConsistent with our goal of testing the dynamics of financial inclusion, governance and ICT on economic growth, we will estimate our equations using the ARDL panel method. ARDL models or autoregressive models with staggered or distributed delays are dynamic models. The particularity of these models is that they take into account temporal dynamics (i.e. expectations, adjustment delays and inter alia), so we adopted a lagged autoregressive model (ARDL). The popularity of the ARDL approach also stems from the fact that the cointegration of nonstationary variables is equivalent to an error correction (EC) process.FindingsThe empirical results simultaneously depict strong endogenous associations between these variables in the short and long run. The short-run analysis indicates that economic growth, financial inclusion, institutional quality and ICT infrastructure development are strongly interdependent. These union states, in their economic growth policies, encourage the financial inclusion (access and penetration of bank branches) of disadvantaged communities. However, efficient institutional policies reinforce this sustainable growth. The efficient use of telecommunications infrastructure requires the regulation of informal employment in WAEMU countries for the better deployment of efficient, secure and cost-effective digital financial payment systems (fintech).Research limitations/implicationsThe findings in this study evidently leave space for future research, especially as it concerns considering how composite governance can be employed as a moderating indicator for financial inclusion. In conclusion, there is an interdependence between financial inclusion, ICT, institutions and economic growth. An effective combination of these elements can create an ecosystem conducive to economic development by promoting access to financial services, harnessing the benefits of ICT and building robust institutions. However, challenges can also arise, such as the need for appropriate regulations and security guarantees for electronic transactions.Practical implicationsGovernments should strengthen financial inclusion and promote policies aimed at improving access to financial services, such as microcredits, mobile banking and initiatives for the unbanked. Financial education is crucial for enhancing financial inclusion. Educational programs that teach citizens how to use financial services can increase participation and stimulate economic growth. Moreover, policies should focus on improving digital infrastructure, such as broadband networks and data centers, to facilitate access to the internet and other technologies and to promote innovation and startups. Governments should strive to create a balanced regulatory framework that encourages investment and innovation while avoiding excessive regulation that could hinder growth. Implementing targeted regulatory reforms to improve efficiency and transparency can enhance investor confidence and support a more dynamic economic environment.Originality/valueThis work constitutes a considerable contribution to the literature on finance, institutions and growth in WAEMU countries and in terms of methodology. The findings in this study evidently leave space for future research, especially as it concerns considering how composite governance can be employed as a moderating indicator for financial inclusion. In conclusion, there is an interdependence between financial inclusion, ICT, institutions and economic growth. An effective combination of these elements can create an ecosystem conducive to economic development by promoting access to financial services, harnessing the benefits of ICT and building robust institutions.

ABSTRACT: Financial inclusion plays a critical role in economic growth and development, offering policy makers in Sub-Saharan Africa (SSA) a powerful tool to address numerous socio-economic challenges. Despite concerted efforts by both the public and private sectors, financial inclusion in SSA remains relatively low, necessitating the exploration of alternative policy approaches. While deposit insurance is widely recognized for its role in supporting the banking sector, which fosters financial inclusion, its direct relationship with financial inclusion in SSA has not been thoroughly examined in the literature. This study addresses that gap by evaluating the effectiveness of deposit insurance as a policy tool for promoting financial inclusion in SSA. Using panel data extracted from the World Bank Global Findex database (WBGFD) and the World Development Indicators (WBWDI) database, we analyze financial inclusion along access and usage dimensions. The WBGFD provides metrics for new measures of financial inclusion for 2011, 2014, 2017, and 2021, as well as annual data on traditional measures of financial inclusion; while the WBWDI supplies data on other relevant socio-economic variables. Our methodology incorporates test of means, exogenous regression models – fixed effects models (FEM), random effects models (REM) – as well as the system generalized method of moments (GMM) which account for endogeneity in the nexus. Key findings reveal that deposit insurance—measured by the practice of Explicit Deposit Insurance Systems (EDIS) and membership in the International Association of Deposit Insurers (IADI)—significantly promotes financial inclusion across both access and usage dimensions. These effects are robust across traditional and new measures of financial inclusion, and remain statistically significant even after controlling for other policy-tractable drivers. The results demonstrate that the higher levels of financial inclusion observed in EDIS-practicing and IADI-member countries, compared to IDIS-practicing and non-IADI-member countries, are not solely due to other drivers but also reflect the positive impact of deposit insurance itself. Additional drivers that positively influence financial inclusion include economic growth, per capita income, banking sector development, financial sector development, infrastructure (mobile subscriptions), and education duration (years of formal education). Based on these findings, we recommend that SSA countries adopt and deepen the practice of EDIS and consider IADI membership to enhance financial inclusion. These strategies, when combined with efforts to strengthen other drivers, can significantly improve financial inclusion and support broader socio-economic development in the region.

Micro, Small and Medium Enterprises (MSMEs) play a crucial role in the global economy by making a significant contribution to economic growth, job creation and increasing social inclusion. However, many MSMEs face challenges in optimizing their potential due to limited resources and access to financial services. Financial literacy among MSME players can be a fundamental pillar in forming smart and sustainable financial decisions. Financial inclusion provides wider access to financial services, such as banking and insurance, for MSMEs. With strong financial inclusion, MSMEs can overcome financial obstacles and take more measured risks, encourage innovation and stimulate local economic growth. The method used in this research is Systematic Literature Review (SLR) by collecting and analyzing journals related to keywords. Based on the literature study conducted, it was found that the importance of increasing financial literacy is the main key in helping Micro, Small and Medium Enterprises (MSMEs) overcome financial challenges and increase the effectiveness of business decision making. The need for more targeted financial education programs for MSME owners was also highlighted. In addition, supporting financial inclusion by providing wider and easier access to financial services can be a driver of MSME growth. Steps such as simplifying the credit process and integrating digital payment services are considered vital. Research also shows that there is a strong synergy between financial literacy and inclusion, where better financial literacy prepares MSMEs to utilize financial services, while effective financial inclusion facilitates their access to such services. Despite these developments, research highlights gaps in access to education and financial technology, emphasizing the need for more inclusive and holistic efforts to support MSME growth.

This study examines the impact of financial literacy, financial inclusion, and financial access on the growth and welfare of Micro, Small, and Medium Enterprises (MSMEs) in North Sumatra, Indonesia, with business growth acting as a mediating factor. Using a quantitative research design and Structural Equation Modeling (SEM) analysis, data were collected from 306 MSME operators selected via purposive sampling. The findings reveal that while financial literacy does not have a significant direct effect on MSME growth and welfare, both financial inclusion and financial access significantly enhance business growth and welfare. Furthermore, business growth serves as a mediating variable, amplifying the positive effects of financial inclusion and access on MSME welfare. The results indicate that MSMEs benefit from better access to formal financial services, such as credit and insurance, which facilitates business expansion and improves the overall welfare of business owners. However, the lack of significant impact from financial literacy suggests that practical financial education initiatives should be paired with improved access to capital and market opportunities. This study highlights the need for integrated policy efforts to enhance financial literacy, expand financial inclusion, and provide easier access to credit to foster MSME growth and welfare in North Sumatra.