Level Of Financial Inclusion Research Articles

Socio‐economic determinants of financial inclusion: An evaluation with a microdata multidimensional index

AbstractFinancial inclusion is a central theme in development policy. While it involves changes at the individual level and comprises several interrelated financial activities, most existing measures rely on macroeconomic variables. We construct an alternative index of financial inclusion using the World Bank Findex—a microdata dataset with 451,372 observations. Applying it, we first analyse the socio‐economic determinants of financial inclusion. Second, we propose a new country ranking of financial inclusion. Our findings comprise three features. First, we do not find evidence of a gender gap in low‐ and middle‐income countries. Second, richer individuals display higher levels of financial inclusion. Third, countries with high self‐employment rates exhibit lower levels of financial inclusion. Our results suggest that financial inclusion is more related to income and employment status than gender disparities, which could lead to a different approach from policymakers on promoting the inclusion of the poor into the formal financial system.

How does financial inclusion influence tourism demand? Empirical evidence from emerging markets and developing economies

ABSTRACT The extant tourism literature has identified a range of economic, geographic, political, and social factors impacting tourism demand. However, existing research has ignored how financial inclusion influences tourism demand, especially in the context of emerging markets and developing economies (EMDEs). We make an empirical contribution in this paper by being the first to distinctly capture the impact of financial inclusion on tourism demand for 85 EMDEs across the world, spanning the time-period of 1995–2017. Using various measures of financial inclusion, we find robust evidence to support our conjecture that higher financial inclusion strongly augments higher tourism demand in an unambiguous manner. Our results also show that the impact of financial inclusivity is not non-linear, implying that financial inclusion in its entirety plays a crucial role in supporting countries to generate more tourism revenues regardless of their levels of financial inclusion, which has significant policy implications.

Literasi Keuangan, Inklusi Keuangan dan Minat Investasi Generasi Z di Jabodetabek

Indonesia's population is dominated by productive age, which is expected to contribute to boosting economic growth and improving people's welfare. The number of the young generation (Generation Z) is an advantage for Indonesia's demographics as well as opportunities and challenges in carrying out digital transformation, both in financial literacy and in the provision of products and services. However, the Financial Services Authority (OJK) in 2019 stated that the level of financial literacy and financial inclusion in Indonesia remains low. This condition might be due to the lack of understanding to the various financial products and services offered by formal financial services institutions. Significantly, Generation Z has realize responsibility for their financial condition and is starting to honourably the importance of investing. Therefore in this study, the level of financial literacy and inclusion of Generation Z in Jabodetabek was studied in order to analyze the effect on investment interest in the capital market. Descriptive analysis and Structural Equation Modeling (SEM) – PLS analysis were used for data generation. The results of this study reveal that the level of financial literacy and the average financial inclusion of Generation Z in Jabodetabek are in the well literate category, financial literacy has no effect on investment interest, in contrary, the financial inclusion has an effect on investment interest.

Financial awareness: a bridge to financial inclusion

ABSTRACT Financial inclusion, which means access to formal financial services for the whole population is India's important policy objective. In this paper, we examine the association between financial awareness and financial inclusion. Using statistical association tests on the primary data, collected from 200 respondents in Nalgonda and Medak districts in Telangana, India, we find that financial awareness is significantly associated with financial inclusion. Regression analysis shows that more financial awareness is associated with a higher level of financial inclusion. We also observe that factors, including being female and having a lower level of education and income, are related to lower financial inclusion.

Financial inclusion as an instrument of accessibility to financial services for EU households

Introduction. Taking into account the European integration intentions of Ukraine, the investigation of the experience of the European Union (EU) countries in the direction of ensuring financial inclusion of the population, especially the young people from whom the socio-economic development of these countries will depend in the future, is relevant. The purpose of the article is to study the experience of the EU countries in the direction of increasing the level of financial inclusion as a key tool for the accessibility to the financial services of the population and justifying the possibilities of its application in Ukraine. Results. The development of financial inclusion in the EU countries and the possibility of applying the best European experience in Ukraine taking into account the directions of its European integration are explored in the article. The essence of the financial inclusion is investigated and its main components are defined. Based on the analysis of financial literacy and financial inclusion indices, there have been drawn the conclusions regarding the problems and prospects for the development of financial inclusion in the EU and Ukraine. Conclusion. In order to develop the financial inclusion, it is necessary to create the appropriate conditions for public access to financial, digital, information infrastructure; provide reliable protection against cyber attacks through the development of the cyber insurance market; develop public-private partnership in the financial sphere and establish appropriate strategies at the state and local levels.

Measurement Methods for Relative Index of Financial Inclusion

ABSTRACT Improved measurement methods for relative index of financial inclusion (IFI) based on Euclidean distance and Mahalanobis distance (hereinafter referred to as Ed-R-IFI and Md-R-IFI) are proposed. The levels of financial inclusion of 55 countries in 2004 are evaluated by using the traditional and improved measurement methods for the IFI. The results indicate that, owing to consideration of the existence of correlations among the various dimensions, the Md-R-IFI method reduces the overall level of financial inclusion and keeps the IFI within a small range of fluctuation compared with the traditional measurement method and the Ed-R-IFI method. The results are more in line with the actual IFIs in various countries, and the method has better applicability and practicality in the measurement of the IFI.

ВПЛИВ ФІНАНСОВОЇ ІНКЛЮЗІЇ НАСЕЛЕННЯ НА РІВЕНЬ НЕЗАКОННО ОТРИМАНИХ ДОХОДІВ КРАЇН З РІЗНИМ РІВНЕМ ЕКОНОМІЧНОГО РОЗВИТКУ

Анотація. Вагомість розуміння того, чому і наскільки важливою є фінансова інклюзія, полягає у визнанні факту, що фінанси або фінансовий розвиток відіграють важливу роль під час формування економічної стабільності. За міжнародною оцінкою, фінанси здійснюють позитивний вплив на економіку через найважливіші функції, які вони виконують: виробництво інформації; розподіл капіталу для виробничого використання; контроль інвестицій і корпоративний контроль; мобілізація та об’єднання заощаджень; сприяння торгівлі, диверсифікації та управлінню ризиками; полегшення обміну товарами та послугами. Таким чином, можна визначити, що фінансовий розвиток країни залежить від виконання вищезазначених функцій. Для регуляторів і держави в цілому фінансова інклюзія є інструментом зменшення рівня «тіньової» економіки, через яку відбувається відмивання незаконно отриманих доходів, уникнення сплати податків тощо. Важливо зазначити, що низький рівень фінансової інклюзії переважно є проблемою економік держав, що розвиваються, хоча розвинуті країни також зіштовхуються з такими викликами. Розроблено та обґрунтовано вплив фінансової інклюзії населення на рівень незаконно отриманих доходів країн із різним рівнем економічного розвитку. Дослідження проводилося в кілька етапів: формування масиву показників, які характеризують фінансову інклюзію населення та рівень незаконно отриманих доходів для 91 країни із різним рівнем економічного розвитку, визначення інтегрального індексу фінансової інклюзії населення на основі використання факторного аналізу, проведення кореляційно-регресійного аналізу функціональної залежності між інтегральним індексом фінансової інклюзії та його складовими і Базельським індексом відмивання коштів. У цілому, було виявлено, що рівень фінансової залученості населення позитивно впливає на боротьбу з відмиванням коштів у всіх досліджуваних країнах. Побудова множинної регресії із включенням до неї як незалежних змінних складових частин індексу фінансової інклюзії (активізація споживачів на ринку фінансових послуг, яка проявляється через активніше використання банківських послуг і Інтернет-ресурсів для купівлі та оплати необхідних товарів чи послуг, дозволяє скоротити обсяг відмивання коштів) дозволило підтвердити отриманий результат. Ключові слова: фінансова інклюзія, фінансова грамотність, незаконно отримані доходи, Базельський індекс відмивання коштів, економічний розвиток. Формул: 6; рис.: 3; табл.: 6; бібл.: 22.

Reaching Financial Inclusion: Necessary and Sufficient Conditions

Financial inclusion is a vital development policy concern; different combinations and conditions of access to (supply) and use of (demand) financial services may predict levels of financial inclusion. With a fuzzy set qualitative comparative analysis, conducted across 61 countries worldwide, the current research establishes that financial literacy and human development are conditions of high financial inclusion; supply-side drivers, such as bank concentration and bank branches, represent substitutive conditions for attaining high levels of financial inclusion. With separate analyses of a split sample, designating developed and developing countries, the authors also determine that the absence of financial literacy and human development, as demand-side drivers, leads to diminished financial inclusion for both sets of countries. In turn, this research offers novel ideas for achieving more efficient policies to prompt financial inclusion.

FINANCIAL INCLUSION IN NIGERIA: AN OVERVIEW

This paper analyses the level of financial inclusion in Nigeria using data from the global findex indicators. The findings reveal that Nigeria witnessed growth in several financial inclusion indicators in the early years of financial inclusion in 2014, but the benefits were not sustained in the later years, especially in 2017. Nigeria’s level of financial inclusion is very low compared to the World average. In the population group analysis, it was observed that the female, poorest, male, older and uneducated members of the population were worse- off in all indicators of financial inclusion in 2017. The implication of the observed decline in the level of financial inclusion in 2017 seems to suggest that there are barriers to financial inclusion in the post-2014 years.

Трансформация монетарной сферы и проблемы финансовой инклюзивности

The ongoing transformation of the monetary sphere, affecting its fundamental, organizational, institutional and legal segments, cannot but have a significant impact on the financial behavior of market entities, primarily the population and representatives of small and medium-sized businesses. And the matter is not only in the digitalization of the financial market recognized and generally accepted by all market participants, in the use of digital technologies in the monetary sphere, but also in the growth of geopolitical, informational, behavioral and communication risks. In this regard, the “new realities of the new world” reinforce the relevance of the stated topic, as they add new aspects to the study of financial inclusion. Based on the analysis of the theoretical provisions reflected in the works of modern foreign and Russian researchers of the monetary sphere, the practice of financial regulators in the context of increasing the level of financial inclusiveness, the author of the article comes to the conclusion that in modern realities, not only study, but also risk-oriented regulation of human involvement in economic processes, in particular, regulation of financial inclusion adequate to the “new realities of the new world”. The financial affordability achieved as a result of such regulation provides an opportunity to attract resources for their subsequent use, to optimize financial flows, and to possibly reduce the level of poverty. And, at the same time, financial inclusiveness is the basis for the inclusion of market entities in the formal economy, preventing a possible “leaving” for the informal, “shadow” sphere of life. The theoretical and empirical basis of the study were the results of the works of domestic and foreign authors, legislative and regulatory acts of the Russian Federation, foreign countries, analytical data of central banks, analytical and information materials of Russian and foreign periodicals, Internet networks, revealing the foundations of the transformation of the monetary sphere, assessing its trends in the context of their impact on financial inclusion. At the theoretical level, the study used such methods as terminological analysis of concepts, aggregation and abstraction, induction and deduction, comparative analysis and synthesis, at the empirical level — statistical and correlation. The conclusions drawn by the author can serve as the basis for the recommendations being developed by the Bank of Russia to maintain and increase the achieved level of financial inclusion in the context of the “new realities of the new world”.

Teachers’ Financial Literacy

The aim of the research is to explore the financial knowledge, attitudes, confidence, behaviour and motivations of teachers (N=752) teaching different subjects. The survey is particularly important because their knowledge, attitudes, and behaviours affect the financial awareness of the students they teach. The results indicate a higher level of financial literacy than assumed, revealing that teachers have a higher level of financial literacy than students in higher education. 86% of those surveyed have savings in addition to bank deposits, such as government bonds and other, more complex forms of savings, indicating a high level of financial awareness and inclusion. Teachers highly value their own financial literacy, and similar to those studying in higher education, are risk averse. Their vast majority consider the development of financial literacy in schools important. Financial literacy trainings have a measurably positive effect on the level of knowledge of the participants. Based on the results of the research, it is worthwhile to shape the curricula and the requirements based on the financial awareness and motivation of the teachers.

Digital Financial Inclusion, Spatial Spillover, and Household Consumption: Evidence from China

Financial development is often considered one of the main drivers promoting household consumption. As a form of financial development, whether digital financial inclusion can promote household consumption has been a concern for researchers and policymakers. Considering geographical connectivity characteristics, we examine the effects of digital financial inclusion on household consumption by applying spatial econometric models and using data from 31 provinces in China from 2013 to 2018. The impact of digital financial inclusion is further disaggregated into direct, indirect, and total impacts. The results show that if digital financial inclusion is improved by 1%, household consumption will correspondingly increase by 0.2207%. The spatial spillover effect on neighboring areas is negative: a 1% increase in the level of digital financial inclusion of nearby provinces leads to a 0.1289% decrease in household consumption in the local province. For policymakers, it is necessary to balance the development of digital financial inclusion and view different areas as a whole when making policies to promote consumption. Further analysis based on subsamples finds that the effect of digital financial inclusion on household consumption is more considerable for rural households than for urban households.

Світові тенденції диджиталізації ринку фінансових послуг

The study is concerned with the global trends in the digitalization of the financial services market. The article distinguishes and describes the main components of accelerating the growth rate of information changes in the field of financial services on the basis of digitalization. Upon the understanding that the digitalization process is progressive, its evolution is examined, wherein three stages of its development are allocated. Leading factors in the development of digitalization of the financial services market are identified, among which, first of all, should be noted such ones as increasing the level of investment in the development of financial technologies and innovations, the spread of e-commerce based on the use of cashless payments, the transition to services aimed at customer needs, and increasing the level of financial inclusion, etc. The consequences of digitalization of the financial services market are also formulated: computerization of structural components of the financial services market and the formation of its financial digital space; directedness of financial activities towards use of the latest digital technologies; creation of the main elements of informatization of the infrastructure of the financial services market and others. On the basis of finding out the impact on the financial services market of innovative and information technologies related to the global network, the global leading tendencies in its digitalization are formed. It is proved that digitalization is a modern direction of formation and development of the insurance services market, which includes technological innovations in combination with information and communication systems, which further serves to improve the quality of service for both existing and potential consumers of financial institutions. It is determined that the formation of a real digital society and the latest digital space, based on the use of various digital technologies, are the main factors that positively affect the development of digitalization in the financial services market.

Drivers of the Consumers Adoption of Fintech Services

Aim/Purpose: This study aimed to explore the impact of environmental drivers and trust on consumers’ adoption of Fintech services in the Jordanian context. It had also evaluated the mediating role of trust on the relation between environmental drivers and consumers adoption of Fintech services. Background: The reviewed studies on Fintech adoption demonstrated a lack of focus on the role of external or environmental drivers on consumers’ intentions to use and continue to use of Fintech services. Amongst the analyzed studies, the majority had examined the role of consumers perception of services usefulness and ease of use while few had included some environmental variables within the investigated variables such as social influence and government support. Furthermore, shortage of Fintech adoption related research in the developing countries, especially the Jordanian context was noted. Methodology: The study conceptual model was derived from Social Cognitive Theory (SCT) and Technological Personal Environmental (TPE) framework. This study was a quantitative one that employed survey method to empirically address its research questions and test the proposed hypotheses. Jordanian residents over the age of 18 who are familiar with Fintech were targeted, and convenience sampling was applied to get representative sample. Data was assembled from 323 respondents using an online questionnaire. Partial Least Squares Structure Equation Modeling (PLS-SEM) was applied to analyze the gathered data through SMART-PLS software. Contribution: This article adds to the existing literature on multiple stands, as it adds to literature related to Fintech adoption, as well as the interaction between consumer environment and their level of adoption. It also enriches the limited literature on the influence of COVID-19 to drive consumer usage of innovative services. Moreover, it supplements the scarce literature on Fintech adoption in the Jordanian settings. Findings: The main findings revealed the positive influence of both environmental drivers and trust as predictors of consumer intention to use Fintech services. It had also asserted the positive mediating effect of trust on the relationship amongst environmental drivers and consumer usage intent. Recommendations for Practitioners: By understanding the importance of consumer environment and trust on encouraging consumer to adopt Fintech services, governments, policy makers and practitioners can utilize this knowledge to adopt their offered services. They need to work on enhancing the technological infrastructure, as well as establishing general technological knowledge. They also need to highlight the role of Fintech service in fighting Covid-19, by adhering to the social distancing rules. Moreover, they need to guarantee the security and reliability of the developed services to increase their level of trust in the offered services. Recommendation for Researchers: This research has confirmed the positive influence of consumer environment represented by social influence, government support, technological readiness, and COVID-19 on their adoption of Fintech services. It has also established the mediating influence of consumer trust on the relation between environmental drivers and consumer intent to use Fintech services. This area is unexplored and needs more validation. Impact on Society: By understanding the factors affecting the Jordanian society in adopting Fintech services, this research provides set of recommendation to the Jordanian government and policy makers that can lead for more adoption of the developed Fintech services, which in turn would lead to better services provided to the society as well as increasing the financial inclusion level in the Jordanian society. Future Research: Future research can explore other environmental variables that were not included in the current research. Future research can also investigate the moderating effect of personal attributes such as consumer’s demographics, or more personal attributes such as self-efficacy, inherit innovativeness or risk aversion. It can also examine the moderating effect of financial literacy and/ or technological background.

Financial Development, Integration, Inclusion, and Economic Growth: Co-Integrating Relationships and Threshold Analysis

This study examines the short and long-run relationships between financial development, integration, inclusion, and economic growth in SADC, as well as the corresponding threshold levels. Covering the period 1995 to 2020, the ARDL technique was used to test for co-integrating relationships, and the GLS was utilized for the determination of the respective threshold levels. The study establishes that bank credit to the private sector negatively affects economic growth in the long run. Most SADC countries were still operating below their respective minimum financial development threshold levels. It is observed that there are no threshold levels for financial integration in SADC, although the result, compared with the threshold levels of financial development seems to suggest that the financial domestic system and some level of economic development are a prerequisite for financial integration decisions. The financial inclusion threshold level for poor SADC countries is low. Yet most of these countries had the highest mobile banking facilities in the region. One possible indication can be that these countries may be operating at financial inclusion levels detrimental to economic growth. Financial development, along with its facets of financial integration and financial inclusion, is found to be the driver of economic growth in SADC. SADC countries, therefore, need to establish a strategic mix of these facets of financial development for the realization of significant economic growth.

FINANCIAL INCLUSION IN THE REPUBLIC OF MOLDOVA: RECENT IMPACTS AND EVIDENCE

This paper analyses the relationships between remittances and financial inclusion in the Republic of Moldova. Using a dataset are created the linear regression models, that show the interdependency of the level of the remittances and the level of financial inclusion. It is also mentioned that the level of financial education places an important role in using financial services. From the policy perspective, is suggested that the Government has to implement the National Financial Inclusion Strategies in order to elaborate an action plan that takes into account all the ways for increasing the level of financial inclusion.

Microfinance as a Mechanism against Financial Exclusion in the European Rural Areas – an Inspiration for the Czech Republic

One of the factors influencing the emergence of disparities between rural and urban regions is the varying level of financial inclusion of the population. The system of microfinancing is becoming an important mechanism against poverty and social exclusion in Europe. However, there is available very limited legal, regulatory and historical information on the microfinance system in the Czech Republic. As a result, microfinance institutions are absent and small entrepreneurs tend to use expensive consumer credit products, thereby increasing the risk of over-indebtedness. The aim of this research is to examine the repayment performance of the European microfinance institutions with increased share of clients from rural areas. Based on an empirical statistical analysis of an unique European microfinance institutions´ database, we are presenting evidence that suggests that microfinance systems perform better in rural than in urban areas. This finding is strongly recommended for consideration in the development of policies to guide legal frameworks regarding microfinancing.

Assessing the impact of mobile money on improving the financial inclusion of Nairobi women

ABSTRACT This paper assesses to what extent, and in what ways, mobile money has affected the financial inclusion of women in Nairobi. Women in Kenya have limited property rights and continue to require approval from their husbands or male family members to conduct financial activities. Besides, most women are concentrated in the informal economy, which has exacerbated their level of financial exclusion since they struggle to provide the documentation that financial institutions require, thus making them more dependent on informal finance. This paper demonstrates how mobile money has significantly decreased the proportion of women in Nairobi excluded from using financial services. Drawing upon survey work conducted by the author across eight areas of Nairobi, this research reveals how mobile money has enabled women to benefit from instant remittance and payment services, and has offered a means of storing money safely, which is an attribute particularly valued by younger women and those with lower levels of educational attainment and income. Although mobile money does not address many of the structural drivers of gendered financial inequality, it has improved levels of financial inclusion by increasing women’s access to various financial channels from which they were previously excluded.

Applying AHP and Fuzzy AHP Management Methods to Assess the Level of Financial and Digital Inclusion

Applying AHP and Fuzzy AHP Management Methods to Assess the Level of Financial and Digital Inclusion

Measuring Digital and Traditional Financial Inclusion in Egypt: A New Index

Digital finance has witnessed rapid development in the last few years that might threaten the way traditional financial services are being used. It creates new opportunities for small businesses and low – income groups that have no or limited access to formal financial services. Therefore, digital financial inclusion plays an important role in enhancing a country`s financial inclusion, meeting some sustainable development goals and achieving higher economic growth. Although few studies took the attempt to measure the inclusiveness of the financial system in Egypt, however, no study did quantify the financial inclusion for Egypt. This paper aims to fill in this gap by contributing to the literature in two ways; first, by introducing a novel comprehensive financial inclusion index for the first time using a three – stage principle component analysis (PCA). Second, we build two separate indices; traditional and digital financial inclusion indices through combining access, usage, and barriers indicators for traditional financial index while for digital financial index we combined access and usage indicators. Findings revealed that both “traditional financial index” and “digital financial index” are equally important in explaining the overall financial inclusion of Egypt and thus, digital finance is seen as a complement rather than a substitute to the traditional financial services. Moreover; our results also revealed that although Egypt has low level of digital financial inclusion (0.31), digital finance is playing a significant and positive role in achieving greater financial inclusion as evidenced by improving the overall index from low (0.41) to relatively high inclusion level (0.52).