Financial Inclusion Research Articles

How does cybersecurity awareness help in achieving digital financial inclusion in rural India under escalating cyber fraud scenario?

ABSTRACT The remarkable rise of cybercrime and its catastrophic consequences pose a significant threat to global financial and banking institutions. Financial inclusion is essential in fostering economic development and enhancing individual empowerment. Integrating digital technologies in the banking sector, promotes digital financial inclusion. However, the increasing prevalence of cybercrimes poses a significant threat towards digital financial inclusion. Considering the rising cases of cybercrimes, the research model integrates the constructs of UTAUT and DOI theory, along with two additional constructs, viz. cyber fraud and cyber security awareness, in the context of digital financial inclusion through payment banking in rural India. By examining the effect of cybercrimes on trust and adoption intention, the study provides valuable insights into the implications of digital financial inclusion. The findings revealed that cyber fraud harms trust and payment banking adoption. Cyber security awareness, facilitating conditions, and trust positively affect payment banking adoption, ultimately enhancing digital financial inclusiveness in rural India. The structural model suggests that emerging cyber fraud has become a significant challenge to digital financial inclusion. In contrast, cyber security awareness among payment banking users could be helpful for rural digital banking users to protect their bank accounts from cyber fraud.

Socio-Economic Determinants of the Financial Inclusion of Women and Men in Burkina Faso: An Analysis using the Sequential Logit Model

Socio-Economic Determinants of the Financial Inclusion of Women and Men in Burkina Faso: An Analysis using the Sequential Logit Model

The role of financial inclusion, urbanization, and energy efficiency on environmental performance in belt and roads initiative (BRI) economies

The role of financial inclusion, urbanization, and energy efficiency on environmental performance in belt and roads initiative (BRI) economies

The welfare impact of financial inclusion: a research agenda

PurposeThis paper provides a systematic review of literature pertaining to the welfare impact of financial inclusion. We identify the 50 most influential publications in the field that have evolved into three distinct categories, each of which we critically review to identify the main contributions of this research area.Design/methodology/approachBy conducting a state-of-the-art literature review, this paper identifies the most influential papers in the research fields on the welfare impact of financial inclusion. One caveat is that as newer publications generally have fewer citations, reviewing prior work can result in a misleading account of emerging trends and research directions. Manual assessment of publications after 2018 facilitates a discussion of important emerging research trends and their directions.FindingsThe three key research streams are identified as financial services and financial accessibility, financial capability, and financial literacy and household welfare. By assessing publications from 2018 to 2023, we also document four key emerging research trends: Fintech and digital financial inclusion, sustainability and climate change, growth, poverty, income inequality, financial stability, and Entrepreneurship. Drawing on these emerging trends, we highlight the opportunities for future research.Research limitations/implicationsKeyword searches have limitations as some papers might be overlooked if they do not match the specific search criteria, despite their relation and significance to the overall topic of the welfare impact of financial inclusion. To address this issue, we have expanded this review by incorporating more literature from other databases, such as the Scopus database which may alleviate this issue.Practical implicationsThe three key research streams contribute to a comprehensive understanding of the welfare impact of financial inclusion. The emerging trends integrate existing knowledge and leave the chance for innovative research to expand the research frontier.Originality/valueThis paper fulfils the systematic literature review streams in the welfare impact of financial inclusion and provides fruitful opportunities for future research.

Investigating the Economic Dynamics of Mobile Money in Post-Conflict Economies: Empirical Evidence from Somalia

This study investigates the economic dynamics of mobile money in Somalia, focusing on its transformative potential to impact economic activities in the short and long term. Adopting a quantitative research design, the study utilizes secondary data from 2010 to 2022. The autoregressive distributed lag (ARDL) approach is employed to assess the impact of mobile money on household consumption, real income, exports, and imports. Theoretical insights from the quantity theory of money further guide the examination of how mobile money influences economic activities. The findings demonstrate that mobile money has a significant positive effect on household consumption, real income, export growth, and import activity both in the short and long term. The study reveals that mobile money not only facilitates financial transactions but also enhances trade efficiency and promotes financial inclusion, thereby stimulating economic activities and growth. The study underscores the need for a supportive regulatory environment for mobile money services. It highlights that financial institutions and mobile money service providers should expand innovative services to include the unbanked population. By doing so, they can leverage mobile money to foster greater economic engagement and empowerment. Policymakers are encouraged to develop strategies that promote financial inclusion and economic development to harness the full potential of mobile money. This study enriches the existing literature by uniquely investigating the economic impacts of mobile money in Somalia, a post-conflict setting, thereby broadening the understanding of how financial technologies can catalyze economic activities and growth in similar contexts.

ROLE OF MICRO FINANCE COMPANIES IN WELFARE OF BELOW POVERTY LINE PEOPLE KNOWLEDGE TO YOUTH

This study focuses on microfinance firms’ tremendous effect on improving the lives of people who are below the poverty line. It is through such organizations that individuals can access financial facilities as well as small credits which help foster inclusive finance systems for marginalized communities. The report also examines ways in which these institutions contribute towards knowledge in money matters thereby enabling persons to make logical choices about their finances while managing them prudently too. It brings out this point by using real-life examples and proofs from research showing that not only do micro-financial initiatives reduce pauperism but they also trigger the growth of economies and development socially in areas where banking services are not available considering that such regions tend to be underserved by other financial institutions. This article stresses the significance of giving credit to poor people because it breaks unnecessary dependency on welfare thus creating sustainable livelihoods for less privileged members within society.

CONCEPTUAL STUDY OF FINANCIAL LITERACY AND FINANCIAL INCLUSION: AMONG THE MILLENNIAL’S

In an evolving period of tremendous technological advancement and intensifying global competitiveness, an economy and its citizens need to operate with awareness, adaptability, and alignment with changes and development in order to stand ahead of and thrive with the dynamics. In spite of conventional and foundational work, modernism's recent introduction and its various benefits are something that one ought to weigh. It turns into a drive for improvement to make things now better in order to achieve the future better. In order to this, Financial Literacy is something which assist to gain meaningful insight and leads to decide more rationally in managing the finance. Hence Relationship between financial literacy and financial inclusion among millennials is examined in this study. Millennials have particular financial opportunities and challenges because they are the first generation grown up in the digital era. This research examines how financial literacy affects the millennials use and access to financial services through an extensive literature reviews and qualitative analysis. It also looks at how educational initiative and technology supports financial inclusion and literacy. The result highlights the significance of focused training programs and digital platforms in boosting millennials financial capacities by pointing to a favourable association between financial inclusion and financial literacy levels. Policy makers, financial institutions and educators must comprehend these dynamics in order to create specialized plans that enable millennials to engage fully in the financial system and make wise financial decisions. Keywords: Financial Inclusion, Financial Literacy, Millennials, Financial Skill, Financial Decisions.

Building bridges of trust: Impact of regional digital financial inclusion on social capital in China

AbstractIn this study, we examine the interplay between regional digital financial inclusion and social capital with a focus on social trust. Our empirical analysis shows that regions with enhanced digital financial services experience a significant boost in social trust. Specifically, a one standard deviation increase in regional digital financial inclusion correlates with an approximate increase of 1% in social trust among frequent Internet users compared with infrequent users. We futher find that growth in social trust is largely attributable to noneconomic factors, such as improvements in perceived fairness. Conversely, the economic factor of increased individual income exhibits limited explanatory strength in this context. These findings shed light on the dynamics of regional development and highlight critical policy considerations for fostering social capital through digital finance.

Digital Transformation and Public Administration: The Impacts of India’s Digital Public Infrastructure

ABSTRACT Over the past decades, digital technologies have become ubiquitous, impacting and changing the ways society operates. Immense public and economic value is being created by improving access to information and resources. Hence, many public administration units around the globe continue to focus on digital transformation. Although mostly associated with digitizing services and workflow via software platforms, India’s efforts have taken a “Lego building block approach” toward technology which can be repurposed and recombined to deliver solutions at the social level. These digital public infrastructure (DPI) blocks have had significant impact on socio-economic development. In this special issue, we explore the role of DPI in digitally transforming public service delivery and in creating public value. The issue aims to make an important contribution to public administration and digital government literature, by examining India’s DPI and its positive externalities, in particular its role in financial and health inclusion. These papers include vital knowledge that can support policy processes on digital transformation and public value creation for India and other developing countries of the global South.

Green credit policies and heavily polluting enterprises’ maturity mismatch between investment and financing: a difference-in-differences approach

ABSTRACT Taking the Green Credit Guidelines as a natural experiment, we explore the effect of green credit policies on heavily polluting enterprises’ maturity mismatch between investment and financing using the difference-in-differences method. We investigate the influencing mechanism of green credit policies on heavily polluting enterprises’ maturity mismatch in investment and financing from the new perspective of overinvestment. We find that green credit policies alleviate heavily polluting enterprises’ maturity mismatch between investment and financing by inhibiting overinvestment. In addition, we find that the effect of green credit policies on the maturity mismatch between investment and financing is more significant for the enterprises in the cities with higher digital financial inclusion, higher corporate social responsibility, and higher green innovation. Further, we find that green credit policies can help promote heavily polluting enterprises to increase green investment.

Does Digital Inclusive Finance Help County Level Governance in the Five Provinces of Northwest China, from the Perspective of Economic Resilience?

Does Digital Inclusive Finance Help County Level Governance in the Five Provinces of Northwest China, from the Perspective of Economic Resilience?

The role of financial inclusion, technology innovation, energy and environmental degradation in determining sustainable growth in Asia

AbstractSustainable growth is a top priority for all economies as they work towards creating a prosperous and resilient future for current and future generations. This study empirically explores the important role of financial inclusion (FI), energy consumption, technological (TECH) innovation and environmental degradation in the economic growth of 13 selected developing Asian countries from 2000 to 2021. The feasible generalized least squares method is used for empirical examinations due to the nature of the data. The study focuses on three dimensions of FI: penetration, usage and availability of financial institutions. The results show that FI, energy consumption and TECH innovation encourage economic growth, whereas ecological footprint discourages economic growth in selected Asian countries. The empirical findings highlight the importance of promoting sustainable growth in Asia through enhanced FI, TECH innovation, sustainable energy practices and environmental conservation. Governments in these countries should prioritize strengthening the financial sector, investing in research and development and implementing effective policies to ensure a clean and green environment. This will lead to inclusive and environmentally responsible development that benefits both current and future generations in the region.

Integrating financial literacy, regulatory technology, and decentralized finance: A new paradigm in Fintech evolution

This study investigates the implications of the interaction of financial literacy, regulatory technology, and decentralized finance applications for financial sector development. A two-step analytical regression approach on EViews 10 was used, which performs a one-factor analysis for each variable to identify the individual impact of each factor. A linear FMOLS approach was used to evaluate the cooperative effect of integration. The methodology was implemented on a dataset comprising 2,880 observations from 23 financial institutions in Jordan.The findings support the hypothesized dynamic interrelations between the essential Fintech factors relevant to the sustainable development of the financial sector, including significant and insignificant factors with the impact of inflation, which provides an adequate understanding of Fintech’s evolution. Additionally, the outcomes consider post-2017 regulatory changes that reflect the role of supervision and regulation for the financial sector’s flexibility and efficiency. Therefore, the results reveal the essential contribution of integrating decentralized finance applications, financial literacy, and regulatory technology to the development of Jordan’s financial sector. Financial literacy serves as a facilitator, regulatory technology is a compliance enabler, and decentralized finance applications are driving forces of innovation and financial inclusion, ensuring a robust and sustainable financial ecosystem. It is shown that the interaction of factors forces the sector’s development, reflecting the world’s trend in digital inclusion and viable financial development.

The Impact of Digital Inclusive Finance on Economic Growth in Xinjiang Uygur Autonomous Region, China

With the advancement of digital technology and the in-depth exploration of inclusive finance, digital inclusive finance has emerged as a result. The development of digital inclusive finance is propelled by the reduction of costs and barriers in financial services through digital technology. Xinjiang Uygur Autonomous Region, due to its remote geographical location, faces spatial constraints that are overcome by digital inclusive finance. Therefore, this paper focuses on the study of the effects of digital inclusive finance on economic growth in Xinjiang. To analyze the impact of digital inclusive finance on economic growth in the Xinjiang region, this paper constructs a dynamic panel GMM (Generalized Method of Moments) model based on panel data from Xinjiang Uygur Autonomous Region for the years 2011-2019. Empirical analysis reveals that digital inclusive finance has a positive effect on economic growth in the Xinjiang region.

How do financial inclusion and bank stability explain agricultural productivity in Sub-Saharan Africa?

PurposeThis study aims to examine the impact of financial inclusion and bank stability on agricultural productivity in Sub-Saharan Africa (SSA).Design/methodology/approachThe study used 38 countries in the SSA with data spanning between 2004 and 2021. The data were analyzed using the two-step system generalized method of moments (GMM) and the panel-corrected standard error (PCSE) model.FindingsThe study found a positive effect of financial inclusion and bank stability on agricultural productivity. The study also discovered that while the access component of financial inclusion has a negative influence on agricultural productivity, the usage dimension has a positive impact.Research limitations/implicationsThe study suggests to policymakers that an inclusive and stable financial system improves agricultural productivity. The findings recommend that policymakers should empower farmers to leverage financial inclusion.Originality/valueThis study provides insightful discussion on the impact of financial inclusion and its various dimensions and bank stability on agricultural productivity in SSA.

Assessing the impact of digital financial inclusion on green total factor productivity of grain in China: promotion or inhibition?

Abstract This study investigates the influence of digital financial inclusion on green total factor productivity of grain in China, using data from 30 provinces (excluding Tibet) from 2011 to 2020. Our findings reveal a dual role of digital finance: it significantly enhances green productivity of grain in central and eastern China but has a contrasting effect in the western regions. The research also uncovers a unique pattern where the benefits of digital finance in one area can negatively affect nearby regions. This research contributes significantly to the discourse on finance and agriculture, providing nuanced perspectives on the regional implications of digital financial inclusion for grain productivity, and thereby enriching the understanding of its role in agrarian economies.

The Impact of Digital Inclusive Finance on High-Quality Economic Development: A Research Study

As China's economy transitions from high-speed growth to high-quality development, digital inclusive finance emerges as a dynamic and pivotal sector within the country's financial system. This domain plays a crucial role in addressing the shortcomings of traditional financial services, enhancing the efficiency of financial services, promoting consumption, and driving economic growth. As the turmoil caused by the COVID-19 epidemic gradually stabilizes, the impact of the epidemic on the economic development of various countries is gradually reduced, and the development of the global economy gradually returns to normal, China's economic development is facing new opportunities and challenge. Given the current challenges in China's economic environment, China has made new adjustments and begun to promote high-quality economic development on the premise of significantly improving quality and efficiency. Therefore, in the current stage of China’s economic development, it is imperative to investigate whether digital inclusive finance can indeed foster high-quality economic development. This paper begins by reviewing literature relevant to digital inclusive finance and high-quality economic development. Subsequently, utilizing panel data from 2011 to 2020 across 30 provinces, a bidirectional fixed-effects model is employed to validate the positive impact of digital inclusive finance on high-quality economic development. The study further explores whether digital inclusive finance exhibits positive effects on high-quality economic development in different regions. Finally, based on the research findings, the paper concludes with several policy recommendations for optimizing the role of digital finance in promoting regional economic growth.

Determinants of Financial Inclusion in Kenya: A Demand-Side Perspective

This study sought to analyze the underlying financial inclusion determinants in Kenya. The study applies ordinal logit regression to examine the effect of the residential area, gender, education level, marital status, and employment type on financial inclusion. Financial inclusion is measured by developing a financial inclusion index for ten binary financial services variables. From the index, three financial inclusion levels are designed. These include low financial inclusion with scores of zero to three, medium with scores of four to six, and high level with scores of seven to ten. The estimates of the ordinal model are statistically significant for all factors considered except gender. Area of residence, age, education type, income, and marital status positively affect the log odds of financial inclusion, while employment is negatively linked. Education, employment, and marital status have interaction effects on financial inclusion. This study recommends that the Kenyan government formulate and strengthen policies to tackle challenges such as gender disparity, rural bank infrastructure development, fostering an environment conducive for entrepreneurship to address unemployment and income disparities, advocating for secondary school completion, and addressing social issues impacting family stability, including separation or the absence of marriage.

Analysing credit risk in persons with disabilities as an instrument of financial inclusion

AbstractIn many countries, the full financial inclusion of persons with disabilities remains to be achieved. Although researchers and international organisations observed that financial inclusion would be facilitated by analysis of solvency, the causes of default risk among this population have yet to be established. Our study, applied to loans made by a Spanish bank to 785 persons with disabilities, identifies several factors relevant to the default risk of this population. The findings show that the purpose of the loan, the borrower’s degree of liquidity and financial leverage, economic context of GDP and risk premium all influence the probability of default of persons with disabilities. These risk factors have a similar impact to that observed in persons without disabilities. Our conclusions can be interesting in the negotiation of bank loans for persons with disabilities and also for bank managers, politicians, government managers, international organisations and other stakeholders concerned about financial inclusion. For developing countries our findings can have a high favourable impact on the financial inclusion of these people, due to their high number in these countries. Furthermore, our conclusions raise the usefulness of adopting political measures such as tax advantages or regulation of specific criteria to evaluate the default risk of these people.

Connection fee as a factor to ensure financial affordability of utility services for consumers

Utilities as a type of mixed public good have the characteristic of non-rivalry, that is, they must be available to the entire population without exception and all households must be able to pay for them. As a rule, such financial inclusion is achieved by providing targeted assistance to low-income families. For example, in Russia this problem is solved by a program of subsidies for housing and communal services. In various countries, other mechanisms are also used: the provision of social housing, budget subsidies for producers, price discrimination. This paper analyzes another way to reduce the financial burden for consumers of utility services, which has been used in most developed countries. It consists of shifting part of the costs of developing engineering infrastructure to future consumers through connection fees (technological connection) for capital construction projects. From the perspective of pricing theory, it is shown that connection fees can reduce the average costs of a utility company passed on to consumers of services; it is graphically illustrated how connection fees increase the financial affordability of utility services for consumers and reduce budget costs for subsidizing the payment of housing and communal services for households with low incomes.