Determinants Of Financial Inclusion Research Articles

Unveiling financial inclusion dynamics: Fintech's resonance in Association of Southeast Asian Nations (ASEAN)

AbstractThis article examines the determinants of financial inclusion in the Association of Southeast Asian Nations (ASEANs), with a particular focus on the role of financial technology (fintech). We constructed an extensive and up‐to‐date Global Financial Inclusion database (2011, 2014, 2017, and 2021) to generate 26,185 observations for seven ASEAN countries over a decade, and conducted a separate case study for Singapore, the region's most financially developed member. The results reveal that financial inclusion and financial technology have experienced robust growth in ASEAN but to varying degrees amongst the member countries. Fintech has a significant impact on financial inclusion over the specified period. The relationship between age and financial inclusion follows an inverted U‐shaped pattern, with the turning point occurring between the ages of 29 and 45. Surprisingly, gender does not appear to be a determining factor. These results align with the aspirations of ASEAN policymakers to promote financial inclusion in line with the sustainable development goals.

Determinants of financial inclusion in Southeast Asia

ABSTRACT This study examines the determinants of financial inclusion – in terms of bank account ownership, formal saving, and formal borrowing – among countries in Southeast Asia. Using the World Bank Global Findex dataset, we document low rates of financial inclusion in Cambodia, Indonesia, Laos, Myanmar and the Philippines. Individuals’ access to finance through borrowing is also generally low. Results show that income, educational attainment, being employed, and mobile phone ownership are positively associated with all three financial inclusion indicators. Age effects are nonlinear and vary across the financial inclusion indicators. Post-regression estimates suggest that the likelihood of formal account ownership is highest for individuals between ages 25 and 35, while formal saving and formal borrowing is most prevalent for those between ages 35 and 65. In relation, we find that the key barriers to opening a bank account in these Southeast Asian countries include costs, bank proximity, lack of trust in financial institutions, and individuals’ inability to complete required documentation. Younger individuals and middle-income individuals are more hesitant to open a formal account if a family member has an account already. Policy interventions targeted at breaking down some of these barriers and widening access to finance would boost growth and inclusion in developing countries.

Socioeconomic and demographic determinants of financial inclusion in South Asia: Integrated policy for targeted groups of population

This paper aims to analyze the individual’s socioeconomic and demographic determinants of financial inclusion and its barriers among for South Asian countries in the lens of existing financial inclusion policy, using World Bank Global Findex database for the period 2011, 2014, 2017, and 2021. We use the Probit regression model to explore the main objective of this study. In addition, we also analyze the trend, pattern, and barriers of financial inclusion for the period 2011- 2021 to identify differences among south Asian countries. Our results reveal that Sri Lanka is the best performer in the inclusivity of financial products as well as removing barriers to financial inclusion in all four periods. While Pakistan and Afghanistan are the least financially included countries, also they failed to remove barriers to financial inclusion. Moreover, our empirical results suggest that individuals who are male, older, wealthier, and more educated are more likely to access financial services, with income and education exerting a higher influence. Further, age shows a non-linear (inverted U-shaped) relationship with financial inclusion indicators. Additionally, we found that individuals having a formal account are the most important indicators of financial inclusion. And the reasons for financial exclusion (i.e., not having an account) are mainly voluntary among South Asian individuals. In fact, it is found that policies like Pradhan Mantri Jan Dhan Yojana for India and National Financial Inclusion Strategy across all South Asian countries play a significant role in accelerating financial inclusion and helping in removing its barriers with different magnitudes. Therefore, our finding stresses the importance of heterogeneous integrated policy measures for the targeted groups of the population, particularly the most vulnerable group among South Asian countries.

The determinants of the financial inclusion of Indonesian female entrepreneurs

This study intends to handle the latter gap: different results of the determinants of financial inclusion, i.e., financial literacy, age, income, and education. Furthermore, it applies the quantitative design, examining the statistical hypotheses. Additionally, the snowball sampling method chose the population of female entrepreneurs in Indonesia. Through the survey in 2022, this study effectively obtained one hundred and fifty-two samples and their responses. Furthermore, the logistic regression model and classification matrix analyze the obtained data. According to this study’s measurements of access, savings, and credit accounts (AA, SA, and CA), financial literacy effectively increases the financial inclusion of female entrepreneurs. At the same time, demographic features, i.e., age, income, and education, have a positive effect on these accounts. The classification accuracy of financial literacy towards AA, SA, and CA is 94.1%, 80.3%, and 95.4%, respectively. For age, the accuracy is 72.4% for AA, 81.6% for SA, and 67.1% for CA. For income, the accuracy is 89.5% for AA, 85.5% for SA, and 96.1% for CA. For education, the accuracy is 88.2% for AA, 78.3% for SA, and 94.7% for CA. Considering this evidence, businesswomen must have the financial knowledge to choose access, savings, and credit accounts to sustain and grow their business scope. For this purpose, central and local government support is still vital to assist them.

Determinants of financial inclusion in households in Peru.

The issue of financial inclusion considers access to and use of quality financial services by household members and different types of companies around the world, allowing us to reach the opportunities that the globalized world offers us. The objective of this research was to identify the socioeconomic factors that determined the inclusion of households in the financial system in Peru in the period of 2021. A quantitative approach was considered, which was non-experimental with a descriptive and correlational design and in which 81,441 pieces of data were obtained from the National Household Survey (ENAHO) of the National Institute of Statistics and Informatics, applying a logit binomial regression. It was determined that 47.02% of households were included in the financial system; 61.93% of those surveyed had their residence in the urban area; on average, respondents had incomplete secondary education; the age of the respondents on average was from 25 to 44 years; the average economic income of the household was less than $251 per month; 72.18% were represented by men as heads of the household and the rest by women; most of the respondents had a cohabiting marital status; the social conditions showed that 23.82% were in the group of being poor; and the majority of households did not have a property title. The determinants of financial inclusion in Peruvian households for 2021 were the area of residence, educational level, age of the respondent, economic income, gender of the respondent, marital status, social status, and property title.

Determinants of Financial Inclusion among Women Petty Trader's in Dodoma City

This paper assesses the determinants of financial inclusion among women petty traders in Dodoma city. Specifically, the paper examines women petty traders’ status of using formal accounts, formal savings, formal credit, and mobile money accounts and socioeconomic determinants of financial inclusion. The paper employed a cross-sectional research design whereby structured and semi-structured interviews and documentary review methods were used for data collection. Non-probability sampling techniques were employed to select a sample of 200 women petty traders. Data analysis employed in this study included both inferential and descriptive analysis. The result of the study indicates that the majority of women petty traders use mobile money accounts, and use informal savings (save money at home, through VICCOBA/ person outside the home), also they lack enough money for opening/maintaining a formal account. The binary probit model result indicates that age, years of schooling, household size, marital status, lack of required documents, costs of financial service, and income are significant determinants of financial inclusion. Therefore, financial institutions should offer basic or low-fee accounts with a reduced/simplified documentation requirement. Government payment should be conducted through banks to promote savings in formal financial institutions and promote financial literacy, and data on financial inclusion among women petty traders should be collected and analyzed to promote the formulation of evidence-based policy

Financial inclusion in India: an analysis from the user-side perspective

PurposeThe aim of the paper is to examine the status and determinants of financial inclusion in India by using the recent micro-level survey data.Design/methodology/approachThe authors construct a multidimensional financial inclusion index to measure the status of financial inclusion in the selected 17 states of India. Subsequently, the authors use the probit model estimation to examine the determinants of all financial inclusion indicators.FindingsThe authors find that southern and north-eastern states perform better in the overall financial inclusion index. In contrast, states like Odisha, Madhya Pradesh, Chhattisgarh, Rajasthan and Uttar Pradesh lag behind. The estimated result shows that the probability of being financially included is higher among urban, richer, educated and salaried individuals. Further, the findings indicate the lower penetration of bank branches and ATMs in the rural parts of the country.Originality/valueWhile numerous studies have explored financial inclusion from a macro-level perspective, there exists a notable gap in the literature at the micro-level. This paper aims to address this gap and contributes to the existing literature in two ways. Firstly, it uses the recent micro-level survey data to construct a multidimensional financial inclusion index for the selected Indian states. Secondly, it examines individual-level attributes as the determining factors of financial inclusion, which has been overlooked in India.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-03-2023-0162

Financial inclusion of Muslim minority in Vellore, Tamil Nadu

AbstractThe study aims to identify the potential determinants of financial inclusion and its impact on the Indian Muslim minority in Tamil Nadu. statistical package for social science and analysis of moment structures software packages were used in the study. Confirmatory factor analysis and structural equation modelling techniques were applied to examine the collected data (n = 300) from the Vellore district from April 2022 to March 2023. The study reveals that financial awareness, access and quality positively and significantly impact financial inclusion. However, the financial usage dimension is statistically insignificant. Additionally, the results from the moderation effect reveal that financial access and quality, along with age and annual income, significantly influence financial inclusion. In conclusion, the study contributes new dimensions to the existing literature by exploring the financial inclusion of Muslims and suggests implications and future scope for further research.

Determinants of Financial Inclusion in the Republic of Congo

Determinants of Financial Inclusion in the Republic of Congo

Financial Inclusion and the Contribution of Fintech in Middle-Income Countries: An Empirical Investigation across a Panel of Countries in Africa and Asia

This paper explores the contribution of financial services to financial inclusion amidst digitization and Fintech growth. It proposes an inclusion index based on African and Asian countries from 2010 to 2019, examining multidimensional characteristics and determinants of financial inclusion. The analysis reveals modest progress, with only eight countries nearing a 0.6 inclusion level, while the rest fall below 0.50. Econometric regression tests highlight a positive relationship between financial inclusion, bank cards, and mobile money, suggesting that digitization of banks has bolstered inclusion. Connectivity and digital payment transactions are also found to be significant factors positively associated with inclusion. Notably, the variable representing Fintech usage stands out as the most significant contributor to financial inclusion.

Socioeconomic determinants of ownership of payment cards, mobile money account, and government remittances of digital financial services: evidence from India

Purpose This paper aims to measure the extent of digital financial inclusion (DFI) and examine the effect of socioeconomic characteristics on using government remittances and the adoption of digital financial services (DFS) during the COVID-19 pandemic. Design/methodology/approach The World Bank Global Financial Inclusion (Global Findex) database 2021 is used in this study, with a sample size of 3,000 Indian individuals. The study measured the demand-side analysis of DFI, namely, accessibility and usage of DFS with selected socioeconomic characteristics such as gender, age, income, education, being in the workforce and residential status of respondents. The dependent variable is binary in nature; therefore, the logistic regression model is used for the data analysis. Findings The results of the study reveal that individuals’ socioeconomic factors, such as female, all the age groups, tertiary education, third- and fourth-income quintile and workforce, are found to have a significant association with “accessibility,” an exogenous variable of DFS. Besides, respondents’ socioeconomic attributes, namely, female, tertiary education, income for all quintiles and workforce, are more likely to use DFSs in the COVID-19 pandemic. The study also finds the residential status of individuals is influencing the accessibility and usage of DFS. Practical implications The findings of the study provide valuable insights to the service providers and policymakers regarding the rapid expansion of DFS by digital infrastructure, simplifying the banking procedures and highlighting the importance of digital financial literacy to accomplish government goals through serving the unbanked population and also design strategies for achieving the objectives of Digital India: “Faceless, Paperless, and Cashless” of DFI across the country. Originality/value Notable studies used World Bank Findex survey data to explore the determinants of financial inclusion in general. This research is one among the few studies to explore the determinants of India’s DFI. Moreover, this study measured the effect of individual socioeconomic attributes on the adoption of DFSs during the COVID-19 pandemic, which has not been included in prior studies. Therefore, this study has added value to the existing literature on financial technology innovation and DFS for the sustainable development of emerging nations.

Demand-Side and Supply-Side Determinants of Financial Inclusion in Indian States: Evidence from Post-Liberalization Period

An initiative of financial inclusion helps to boost the economies of poorer regions and countries. Also, greater financial inclusion is a prime driver for attaining social inclusion in most of the developing nations across the globe. So, the main purpose of this article is to investigate the determinants of financial inclusion from both demand- and supply-side variables in Indian states during the post-liberalization periods (1993–2015). Furthermore, the study uses different econometric models such as fixed effect, random effect, panel-corrected standard errors, and feasible generalized least squares for analysis purpose. The empirical findings of this study suggest that among the demand-side factors, literacy and per capita state GDP have a positive impact on financial inclusion, whereas other two variables like rate of unemployment and percentage of rural population have a negative impact on financial inclusion. Likewise, from the supply-side factors, our empirical findings depict that all four variables (i.e., road length, electricity supply, social sector expenditure, and capital receipt) have a positive and significant effect on financial inclusion in the post-liberalized Indian states.

Understanding Financial Inclusion of Individuals Engaged in Agriculture: Evidence from Upper-Middle-Income Balkan Economies

ABSTRACT Emphasizing upper-middle-income Balkan Economies, this study focuses on the determinants of financial inclusion on a sample of individuals engaged in agriculture. Using logit estimations, we investigate socio-economic characteristics influencing financial inclusion, including owning a bank account and holding savings. Results reveal that individual characteristics, such as education, income, gender, and online payment usage are influential drivers. Financial inclusion is also impacted by economy-level variables including the share of agriculture in GDP and financial infrastructure density. The study underscores the importance of tailored policies to promote financial inclusion, particularly for vulnerable groups in agriculture-dependent economies.

Determinants of financial inclusion among women-owned enterprises: a case study of the informal sector

PurposeThe purpose of this paper is to analyse the determinants of financial inclusion among women-owned informal enterprises in India.Design/methodology/approachThe study is based on a primary survey of 321 informal enterprises. The data has been collected through a structured questionnaire. A chi-square test has been used to examine the significant association between the characteristics of informal enterprises and their owners and financial inclusion. A logistic regression model has been developed to analyse the determinants of financial inclusion among women-owned informal enterprises.FindingsA significant and negative association has been found between business duration and entrepreneurs’ experiences with financial inclusion. In addition, the chi-square test shows a significant association between resource capability, use of ICT by enterprises and financial inclusion. Further, logistics regression shows that duration of business, entrepreneurial experience, resource capability in terms of machinery and equipment use, and ICT are significant determinants of financial inclusion among women-owned informal enterprises.Practical implicationsThere are several practical implications for national policymakers and other stakeholders, such as banks and international bodies working on financial inclusion. It is suggested that while designing the policy for financial inclusion among woman-owned informal enterprises, it should ensure that experience and older woman entrepreneurs are included in financial inclusion schemes.Originality/valueThere has been very few research on financial inclusion in woman-owned businesses. However, no research has been conducted on the financial inclusion of women-owned informal businesses. This study fills a gap by investigating the factors that influence financial inclusion in women-owned informal businesses.

Determinants of Financial Inclusion of Female Entrepreneurs in Somalia

Determinants of Financial Inclusion of Female Entrepreneurs in Somalia

The Determinants of Financial Inclusion in Vietnam: A Demand-Side Approach

While a large body of studies has captured macro financial inclusion on the supply side, this research paper contributes significantly to the literature on determining financial inclusion in Vietnam from the demand side. The primary target of this paper is to measure an overall financial inclusion index by employing micro data of 1,002 respondents in Vietnam from the World Bank. Additionally, based on the calculation of financial inclusion index, we investigate the determinants of financial inclusion and examine the barriers to financial inclusion in Vietnam. The ordinary least squares regression analysis and logit regression are employed to estimate the effect of demographic characteristics and the barriers to financial inclusion. The main findings reveal that people who are female, wealthier, more educated, or in the workforce exhibit a higher financial inclusion index. Besides, the financial inclusion level of high-income people is not affected by working status, while this level of middle and low-income people does. Women are also less likely to be financially included because they complain that financial institutions are too far away or because another family member has an account. Older people are more concerned about lack of documentation, lack of trust, and demand reasons. To achieve the purposes of robustness, the measurement of financial inclusion was changed following previous studies to confirm robust and stable baseline results. Accordingly, these findings contribute to issuing adequate policies that break the barriers to financial inclusion and enhance financial inclusion, especially for less educated, poor, out of the workforce, and old people.

FINANCIAL INCLUSION FOR SELECTED OECD COUNTRIES

Purpose- Financial inclusion is defined as a process that ensures the ease of access, availability, and usage of the formal financial system for all members of an economy by emphasizing the use of accessibility and availability of financial services. A financial sector is measured and compared on four main features; debt is the size of financial institutions, access is the access and use of financial services by the users, efficiency is the efficiency in the provision of financial services, and stability is the stability in the provision of financial services. Financial inclusion, in short, is adults' access to and use of financial services. This study aims to measure the financial inclusion level for selected OECD countries from 2010-2021. Also, this study aims to estimate the effect of financial inclusion on economic growth and income inequality for selected countries. Methodology- The data used in this study cover a range of variables related to financial inclusion from various institutions, including the IMF-Financial Access Survey (IMF-FAS), the World Bank - World Development Indicators (WB-WDI), the World Bank - Global Financial Development Database (WB-GFDD) and the Standardized World Income Inequality Database (SWIID). These variables provide insights into the dimensions and determinants of financial inclusion and their impact on economic and social outcomes for selected OECD countries. In the study, we run panel data regressions for each group separately, using GDP per capita as the dependent variable to determine the impact of the Financial Inclusion Index on economic growth. We also construct two different models for each group of countries with and without the added control variables into the models. Findings- The analysis reveals that the effect of financial inclusion on economic growth is negative for all groups of countries. The impact is significant for Group 1 and Group 2. The magnitude of coefficients changes when we add control variables to the model. However, it does not change the significance level of the coefficients. The magnitude of the coefficients increases as countries’ per capita income increases. At the same time, the effect of financial inclusion on the GINI index is significant only in the model for Group 3 with control variables. The sign of the impact is negative. It implies that the GINI index decreases as the financial inclusion index increases. So, the effect of financial inclusion on income inequality is positive for countries in Group 3. Conclusion- The empirical results did not support the relationship between financial inclusion and economic growth (GDP per capita). These results may be explained by advocating the financial sector's quick and fundamental digital transformation. Hence, the rules for availability, accessibility, and usage of financial products and system are completely changed in the past ten years. On the other hand, the relationship between financial inclusion and income inequality, measured by GINI Index, is consistent with the literature only for Group 3 countries (developing countries). The increase in the gap between rich-developed and developing countries may explain these results. An increase in financial inclusion still supports adjustments in income inequality in developing countries, but its effect is disappeared in developed countries in the last 12 years. Keywords: Financial inclusion, economic growth, OECD countries, financial indicators, income inequity. JEL Codes: G20, G21, G23

The determinants of financial inclusion from the households' perspectives in Vietnam.

Various studies have been conducted to measure financial inclusion at the country level. However, measuring financial inclusion at the household level has largely been neglected in the existing literature, particularly for emerging markets such as Vietnam. This study constructs an index of financial inclusion at the household level using the Vietnam Household Living Standard Surveys (VHLSS) in 2014, 2016, and 2018. We also identify the determinants of financial inclusion from the perspective of Vietnamese households. Our study also utilizes an ordered logit model to examine the effects of the determinants on each level of financial inclusion. Our empirical results reveal three key determinants, including (i) total income per household, (ii) relative income representing the difference between the average income of the province that the household currently lives in and the total income of this household, and (iii) the distance from the household to the nearest bank branch, are crucial factors driving the financial inclusion. While the total income per household positively enhances financial inclusion, relative income appears to reduce the degree of financial inclusion. Besides, distance to the nearest bank branch poses another challenge in achieving the financial inclusion goals in Vietnam in the future.

SOCIO-ECONOMIC EFFECTS OF FINANCIAL LITERACY ON FINANCIAL INCLUSION OF WOMEN IN NIGER STATE, NIGERIA

This paper aims to contribute to the existing body of knowledge on the socio-economic effect of financial literacy on the financial inclusion of women. By shedding light on the importance of financial literacy and the barriers women face, policymakers, financial institutions, and organizations can develop targeted strategies and interventions to promote women's financial inclusion, ultimately leading to improved socio-economic outcomes and gender equality. This study employed the probit regression on the National Bureau of Statistics general households’ survey data to appraise the effect of financial literacy on financial inclusion of women in Niger State. The estimation result shows that financial literacy positively and statistically influences financial inclusion options (cash at hand, purchasing power, account ownership, bank access, and credit access) in Niger state. Similarly, education status, age, and gender are determinants of financial inclusion. The study concluded that financial literacy is essential for achieving financial inclusion among women. To encourage financial inclusion among women, the study recommends that the government should initiate programs that will train women and also include financial literacy education at secondary or tertiary level to teach skills and information on how to utilize and manage financial services and products. The Central Bank should also mandate that the financial institutions to establish customer financial advisory units to educate their clients on managing and using financial products and services available to them to create wealth, thus improving living standards

Financial Literacy and Financial Inclusion

The study employed the Probit regression on the National Bureau of Statistics general households survey data to appraise the effect of financial literacy on financial inclusion in Niger State. The estimation result shows that financial literacy positively and statistically influences financial inclusion options (account ownership, bank access, and credit access) in Niger state. Similarly, education status, age, and gender are determinants of financial inclusion. The study concluded that financial literacy is necessary for achieving financial inclusion. To encourage financial inclusion among youth, the government should include financial education in secondary school and tertiary to teach skills and information on how to utilize and manage financial services and products. The central bank should also mandate the financial institutions to establish customer financial advisory units to educate their clients on managing and using financial products and services available to them to create wealth, thus improving living standards.