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Financial Inclusion, Poverty Reduction and the Millennium Development Goals
Abstract
Bien que les approches conventionnelles concernant la réduction de la pauvreté, telles que formulées par les objectifs du millénaire pour développement (OMD), soient utiles et nécessaires, elles ne sont pas suffisantes pour relever le défi. L'intégration financière est une approche alternative offrant des solutions progressives et complémentaires, tout en favorisant un processus de développement intégré qui s'adresse directement aux OMD. Cet article en décrit les grandes lignes, en commençant par expliquer les principes de bases de l'intégration financière, ainsi que ses connexions avec la réduction de pauvreté et les OMD, et ceci en se basant sur des recherches de terrain ainsi que sur la littérature secondaire sur le sujet. Suit un exposé de plusieurs expériences internationales, afin de prendre en compte les aspects pratiques de l'approche, avant une troisième partie qui synthétise plusieurs modèles d'intégration financière. Etant donné la crise financière globale actuelle, la nécessité d'intégration financière est plus impérative que jamais. Cet article se termine en proposant plusieurs moyens possibles pour renforcer les liens entre l'intégration financière, la réduction de pauvreté, et les OMD par rapport à des processus de planification, de définition de politiques de développement, ainsi que de programmation.European Journal of Development Research (2009) 21, 213–230. doi:10.1057/ejdr.2008.17
... Internationally, sustainable microfinance has been linked to several Sustainable Development Goals (SDGs), including SDG 1 (No Poverty), SDG 5 (Gender Equality), SDG 8 (Decent Work and Economic Growth), and SDG 11 (Sustainable Cities and Communities) (UNDP, 2021;UNESCAP, 2020). However, local models of urban microfinance remain under-theorized and underdocumented, especially in Southeast Asia (Lévesque et al., 2021;Chibba, 2009). ...
... This is particularly important in urban environments where top-down interventions often fail due to socio-spatial diversity (Banks et al., 2015). Studies in Southeast Asia suggest that when local governments partner with communities to manage funds, both social capital and repayment rates improve (Lévesque et al., 2021;Chibba, 2009). ...
... The moderate negative correlation between access to credit and poverty rates (r = -0.62, p < 0.01) supports the argument that financial inclusion can be a tool for poverty reduction (Chibba, 2009). However, the persistence of income inequality, as indicated by the modest decrease in the Gini coefficient, highlights the complex relationship between financial inclusion and economic equality. ...
... The moderate negative correlation between Bridging the Gap: Analysing the Impact……………….. Gaurav Mahajan 62 access to credit and poverty rates (r = -0.62, p < 0.01) supports the argument that financial inclusion can be a tool for poverty reduction (Chibba, 2009). However, the persistence of income inequality, as indicated by the modest decrease in the Gini coefficient, highlights the complex relationship between financial inclusion and economic equality. ...
This study examines the relationship between financial inclusion initiatives and economic empowerment in India. Utilising data from the Reserve Bank of India (RBI) and the Pradhan Mantri Jan Dhan Yojana (PMJDY), the article analyses the impact of increased access to financial services on various economic indicators. The findings suggest a positive correlation between financial inclusion efforts and economic empowerment, particularly among previously underserved populations. The study highlights the importance of targeted financial literacy programs and the role of technology in expanding financial access. These insights contribute to the ongoing discourse on effective strategies for promoting inclusive economic growth in developing economies.
... The notion of Financial Inclusion (FI) surfaced from research conducted since the start of the 2000s, which suggested that financial exclusion was a primary contributor to income inequality (Chibba, 2009). In order to progress in the field of finance, FI is a crucial part of financial development that fosters institutional advancement and accelerates the economic expansion of recipient nations (Le et al., 2019). ...
... Discussions about financial inclusion's role in perpetuating poverty and underdevelopment began in the year 2000 when research on the subject was conducted (Chibba, 2009). Numerous research has monitored how development and financial depth affect environmental sustainability. ...
This study investigates how economic growth, energy intensity, financial inclusion, and trade globalization impact the load capacity factor in the ASEAN-5 region. Using data from 2000 to 2022 from reputable databases, the study analyzed the load capacity curve (LCC) hypothesis through comprehensive statistical analysis. Several diagnostic tests, such as cross-sectional dependence, slope homogeneity, unit root, and cointegration, to select a suitable long-run estimation model were conducted. The study utilized the Driscoll-Kraay standard error (DKSE) approach to address identified issues like cross-sectional dependence, heterogeneity, and unit root problems. DKSE estimation showed that the LCC hypothesis was not present in the ASEAN-5 region. It is worth noting that an inverted-U-shaped relationship between per capita income and the load capacity factor was found, emphasizing the complexity of economic dynamics in the region. Furthermore, the analysis revealed a strong correlation between energy intensity and the load capacity factor, with trade globalization having a significant negative effect. Surprisingly, financial inclusion did not show a significant correlation with the load capacity factor, highlighting the intricate role of financial accessibility in economic performance. To enhance the strength of the DKSE estimation, the study also utilized quantile regression analysis, which supported the results of the DKSE approach. The study confirmed that the LCC hypothesis is not applicable in the ASEAN-5 region and offered a more detailed analysis of the varying effects of energy intensity and trade globalization at different levels. Conclusively, this study provides valuable insights into the complex relationships among economic growth, energy intensity, financial inclusion, and trade globalization in the ASEAN-5 region. A thorough analytical approach enhances comprehension of sustainable development and economic resilience in the region, guiding policy decisions and future research efforts.
... The country has achieved notable advancements in this area, particularly through the widespread adoption of digital banking and mobile payment services. However, while the use of digital financial services is increasing, regional disparities and a lack of financial literacy remain key obstacles to achieving inclusive economic growth (Chibba, 2009). Although numerous studies emphasize the positive effects of digital financial services on economic growth, debates persist regarding the sustainability and extent of these benefits (Park & Mercado, 2018). ...
... Their findings indicate that M-PESA significantly improved availability of financial services, especially in rural regions, while also promoting economic activity. Chibba (2009) highlighted the vital importance of digital finance in incorporating lowincome individuals and small businesses into the formal financial system. These services enhance financial stability and resilience. ...
Facilitating the integration of individuals and enterprises into the financial system, financial inclusion promotes wider engagement in economic processes and contributes to economic development. Over the past few years, Turkey has made significant strides in enhancing financial inclusion, largely attributed to advancements in digital technologies. Nevertheless, the precise role of these improvements in driving economic growth remains a topic of ongoing discussion. Key indicators such as bank account ownership, the utilization of mobile payment platforms, and access to credit are commonly used to measure financial inclusion. These indicators influence economic growth through both direct and indirect channels. Increased access to financial services enables businesses to obtain funding more effectively and supports individuals in managing their savings. However, limited financial literacy can act as a barrier, reducing the potential positive effects of financial inclusion on economic growth. An in-depth analysis of Turkey's financial inclusion indicators, utilizing data from the IMF's International Financial Index spanning 2009 to 2022 and assessed through the ARDL methodology, indicates a modest influence of financial inclusion on economic growth. Several challenges, such as inadequate access to financial services for low-income populations and ongoing regional disparities, have limited the capacity of financial inclusion to significantly propel economic advancement. While Turkey's financial inclusion indicators still fall short of those seen in developed countries, the increasing uptake of digital financial services highlights opportunities for future progress. Evidence from other nations underscores that higher levels of financial inclusion can play a transformative role in fostering economic growth. The findings suggest that Turkey has yet to realize the full economic benefits of financial inclusion. Future studies should aim to optimize policies targeting financial inclusion and develop approaches to enhance their effectiveness. Key initiatives may include promoting financial literacy, expanding the reach of digital financial platforms, and addressing regional disparities in access to financial services.
... Financial inclusion is vital for socio-economic development, yet the marginalised struggle to access secure banking services. Despite advances like digital payments, many still rely on insecure methods, such as cash withdrawal at cyber cafes, increasing vulnerability to fraud [9,10,11]. To address this, we developed an ATM training app using Augmented Reality (AR) to provide realistic, hands-on experience with virtual ATMs, promoting self-reliance [12]. This experiment presents a novel MR implementation for cultural integration in interaction and experience design. ...
This project introduces XR-Based Interactions and Applications for Social Impact, leveraging Virtual Reality (VR), Augmented Reality (AR), and Mixed Reality (MR) technologies to address challenges faced by underserved Indian communities. The project aligns with broader goals of AR and VR technologies in supporting initiatives like Digital India by bridging educational, financial, and cultural divides while fostering accessibility and empowerment, working in unison in a progressive society
... The significance of the relationship between financial innovation and economic development has become a widely discussed topic. There has been a surge in the number of articles and empirical research conducted in Chibba (2009) and Bara & Mudzingiri (2016), developing countries focus on well-being issues, particularly financial inclusion. ...
In this article, we analyze the dynamic causal relationship between financial innovation, sustainable development of the stock market, and economic growth in Mexico for the period from 1990 to 2020. We utilize the AutoRegressive Distributed Lag (ARDL) bounds testing procedure and the Granger causality test to generate a model that determines the direction of causality among the variables. This model allows for the inclusion of explanatory variables to analyze dynamic relationships between them. To this end, financial innovation is incorporated into a trivariate model involving financial development and economic growth, creating a bidirectional causality model. Another advantage is that it provides consistent and efficient estimates even with small samples. Our results indicate that, overall, access to international financing has a more significant impact on the sustainable performance of Mexican companies compared to domestic financing. This effect is maximized when companies use financial resources to foster innovation, which acts as a key catalyst for sustainability. Furthermore, although direct government support is not statistically significant, the training and advisory services provided by the government facilitate a more efficient use of financing, promoting both sustainability and business innovation. These findings emphasize the importance of a strategic approach that combines diversified financing, innovation, and appropriate public policies to encourage a more competitive and sustainable business development in Mexico.
... Pakistan, despite its efforts, lags behind its regional counterparts regarding financial access and usage (Zulifqar et al., 2016). Factors such as low financial literacy, inadequate infrastructure, and socio-cultural barriers contribute to this disparity (Chibba, 2009). Financial exclusion not only restricts individual economic potential but also hinders aggregate economic growth by decreasing investments and increasing transaction costs (Omar & Inaba, 2020). ...
This study explores the connection between financial inclusion and inclusive growth, highlighting the pressing need for such growth in contemporary Pakistan alongside the ongoing efforts to enhance financial inclusion levels. Utilizing a time series dataset from 2004 to 2022, we investigate variables including the index of inclusive growth, the composite index of financial inclusion, FDI, budget deficit, remittances, and government effectiveness. The analysis employs the Markov regime-switching technique to address the non-linearity of the data. Findings indicate a non-linear relationship between inclusive growth and financial inclusion. Financial inclusion has a significant and positive effect on inclusive growth during low-growth periods but exhibits negative effects during high-growth periods. Government effectiveness consistently demonstrates a positive impact across both high and low-growth phases, with a more pronounced effect during low-growth periods. Remittances negatively influence growth, while FDI and budget deficit show significant positive effects during low-growth periods. Key recommendations include enhancing rural financial access and digital literacy during low-growth phases, addressing structural and regulatory inefficiencies during high-growth periods, and integrating Islamic finance into national strategies. Strengthening governance and periodically reviewing policies to align with evolving economic conditions are also vital for achieving sustained and equitable development.
... Financial inclusion is pivotal in reducing inequality, enhancing economic stability, and empowering marginalized populations (Demirgüç-Kunt et al., 2018). In the context of inclusive development, FI plays a crucial role as it helps in tackling poverty, inequality, thereby addressing the Millennium Development Goals (Chibba M, 2009). With access to the basic account at either a bank or a financial institution, people will start using different banking services like credit, insurance, etc, and this would lead to improvement in their overall quality of life (Global Partnership for Financial Inclusion, 2016). ...
Information Communication Technology (ICT) 's contribution to financial services and economic growth is extensively researched. With technological development, the financial systems are converging with ICT platforms, thereby leading to digital financial systems, creating opportunities that bridge the gap between affluent and disadvantaged sections in emerging economies. In this study, we employ the panel data estimation method to evaluate the impact of ICT in providing financial services that would lead to sustainable economic growth in 12 emerging economies from 2010 to 2024. The findings emphasize the critical role of digital financial services and ICT infrastructure in boosting financial inclusion and driving inclusive economic growth. The Random Effect model has inferred that there exists a moderate effect of fixed telephone lines and mobile cellular subscribers on GDP by simplifying digital applications, integrating regional languages. By ensuring secure systems in places, the regulators and service providers can contribute to the sustainable economic growth of both the country and the underserved communities.
... Estudos empíricos vêm demonstrando que a pobreza e a desigualdade de renda estariam reduzindo com o acesso a serviços financeiros formais, melhorando as condições de vida das pessoas e o bem-estar (Álvarez-Gamboa et al., 2021;Levine, 2007;Burgess;Pande, 2005;Chibba, 2009;Clarke et al., 2006;Honohan, 2008;Jeanneney;Kpodar, 2011;Mercado Jr., 2018;Ratnawati, 2020). Há ainda diversos estudos que avaliam evidências sobre a relação entre a inclusão financeira e o crescimento econômico e desenvolvimento (Atindéhou et al., 2005;Kim et al., 2018;Levine, 1993aLevine, , 1993bPradhan et al., 2016;Raza et al., 2019;Van et al., 2021). ...
Resumo Dada a crescente importância da inclusão financeira no desenvolvimento socioeconômico, este estudo busca propor um Índice de Inclusão Financeira em nível municipal para o território brasileiro, abrangendo os anos de 2016 a 2022. A análise dos dados revela que, embora tenha havido pouca mudança de 2016 a 2019, no período de 2019 a 2022 houve deterioração significativa nos níveis gerais de inclusão financeira, especialmente nas regiões Norte e Nordeste. Em 2022, a inclusão financeira mostrou-se ainda mais reduzida em todas as regiões do país. Os resultados destacam a necessidade de políticas públicas focadas na melhoria da inclusão financeira, considerando as disparidades regionais identificadas. O estudo contribui para a literatura ao oferecer uma ferramenta de medição multidimensional da inclusão financeira, considerando métricas de acesso, uso e potencial digital, em nível municipal, promovendo a compreensão das dinâmicas regionais e a formulação de políticas mais eficazes.
... Additionally, the development of financial systems and increased financial inclusion play a key role in reducing energy intensity. Financial inclusion is crucial for addressing issues related to poverty and inequality (Chibba 2009). By providing accessible and sustainable financial resources to a broader population segment and businesses, and financial inclusion fosters economic growth. ...
This study focuses on the nexus between financial inclusion and energy intensity of G7 nations from 1993 to 2023 with the expectations of presenting energy efficiency as a solution to global energy issues. During the estimation process, this study employs advanced quantile methodologies such as the Quantile unit root tests, the Quantile cointegration analysis, the Quantile-on-Quantile regression, and quantile Granger causality to determine the nonlinear and heteroscedastic relationship between financial access and energy consumption. The study shows that different countries’ cointegration relationship is not symmetric; this means, that financial inclusion reduces energy-intensive countries. This strongly implies that enhanced financial service increases access to technologies and practices such as energy-efficient technology and sustainable energy solutions thereby decreasing the consumption of energy. Further, the study establishes that there is a two-way causality between on one hand, financial inclusion and on the other hand energy intensity, which connects both financial and energy industries. The outcomes also point out that financial inclusion affects each quantile in different manners so policies aimed at the level of financial development and energy consumption should be developed. These observations reinforce the importance of aligning policies aimed at enhancing financial liberalization with energy liberalization in a bid to offer energy to societies. The findings of the study are important for policy makers, especially in underpinning the significance of financial access in controlling energy consumption and achieving the objective of sustainability in the G7 countries.
... Over the past two decades, the global development agenda has increasingly emphasized financial inclusion as a pathway to inclusive growth. Institutions such as the World Bank, the United Nations, and various regional bodies have initiated policies aimed at bringing financial services-such as savings accounts, credit, insurance, and digital payments-to the underserved [3]. However, the gap remains disproportionately high in rural settings due to infrastructural deficits, geographic isolation, and socio-cultural barriers. ...
Financial inclusion has emerged as a critical enabler of poverty reduction and economic empowerment, particularly within underbanked rural populations across the globe. Despite progress in financial sector reform and digital transformation, significant disparities persist in access to affordable and reliable financial services for marginalized communities. From a macroeconomic perspective, the exclusion of rural households from formal financial systems limits their capacity to save, invest, insure against risk, and participate meaningfully in local and national economies. Financial inclusion strategies offer transformative potential by bridging these structural gaps and facilitating broader socioeconomic development. This paper examines the multidimensional nature of financial inclusion, analyzing how policy, technology, institutional frameworks, and cultural norms intersect to shape access to financial services in rural contexts. It explores innovative strategies such as mobile banking, microfinance, agent banking, digital identity systems, and community savings schemes that have proven effective in extending financial services to remote populations. The discussion also emphasizes the role of government regulations, public-private partnerships, and financial literacy in scaling and sustaining these interventions. Case studies from sub-Saharan Africa, South Asia, and Latin America provide empirical evidence of how inclusive financial services have improved household incomes, supported small-scale entrepreneurship, and reduced vulnerability to economic shocks. However, challenges such as infrastructural deficits, gender inequality, and trust barriers continue to hinder progress. The paper concludes by proposing a comprehensive framework for financial inclusion that integrates digital innovation, inclusive regulation, and grassroots engagement. This framework aims to foster not only access but also meaningful and sustainable use of financial services as a catalyst for rural poverty alleviation and long-term economic empowerment.
... The situation is relatively better in East Asia and the Pacific, where 74.7 percent of the poorest 40 percent of the population have bank accounts or access to mobile payment services. Access to financial services plays a crucial role in poverty alleviation efforts because it enables poor communities to have access to poverty reduction programs and to initiate/develop their own businesses (Chibba, 2009). Financial inclusion trough mobile phone subscription also has showed positive impact on poverty alleviation in 123 countries, enables remittance inflows (Inoue, 2024). ...
The province of West Java is the most populous province and has high levels of unemployment and poverty in Indonesia. This research analyzes the impact of financial inclusion and internet access on poor households' income in West Java. The study uses data from the March 2022 Social and Economic Survey by the Indonesian Central Bureau of Statistics and applies an econometric model. The analysis introduces a novel approach by categorizing poverty based on the poverty line, specifically targeting the lowest 20% and 40% of income-earning households. This method allows for a deeper understanding of the impact of financial inclusion and internet access on these specific segments. The findings highlight that financial inclusion and internet access positively influence the income of poor households. Specifically, savings ownership increases the income of poor households. Access to credit positively affects income for the lowest 40% income bracket. However, internet access mainly influences sales and purchases within the 40% lowest income group, with limited use in purchasing activities.
... Due to the lack of financial services for many poor people, they depend on cash that can be unsafe and difficult to manage4. As one solution to poverty reduction has been proposed financial inclusion (Chibba, 2009;Sharma 2014;Park & Mercado, 2015). Financial inclusion can be understood as a process that provides access, availability and use of financial services for all participants in the economy (Sarma, 2008). ...
The first goal of Sustainable Development Goals (SDGs) is the absence of poverty to be achieved by 2030. Thus, access to and usage of financial services play an important role in achieving this, where ICT and digital technologies are the main tools, that describe it as a digital financial service (DFS). It defines the provision of financial services and products through digital channels (mobile phone, cards, Internet etc.), and where DFS can be used remotely. DFS inclusion means to increase an access and usage of DFS through digital channels. We collected data for two years (Findex, 2014 & 2017) in 120 countries, overall 240 observation, and with depended variable as DFS inclusion, and independent 12 variables, such as GDP per capita, ATMs per adults, basic skills, Internet usage, mobile subscription, mobile 3G & 4G coverages (separately), mobile internet tariffs, handset prices, political stability, control of corruption and cybersecurity. In general, the regression yielded good results. Factors such as GDP per capita, political stability, control of corruption, mobile 4G coverage, ATMs per adults and mobile Internet tariffs are statistically significant factors for DFS inclusion. In addition, the r-squared value shows more than 0.8 in all models (running with 3G coverage, 4G coverage, both and also with dummy variable).
... Research has been conducted to investigate the influence that mobile money has on the level of financial inclusion in developing nations (Porteous, 2006). The Policies and Initiatives of the Government and (Chibba, 2009) one of the most important factors in the process of boosting financial inclusion is the implementation of supportive government policies. These policies include financial literacy initiatives, financial inclusion targets, and regulatory reforms. ...
This study evaluates the current state of financial inclusion in Sri Lanka, analysing progress, and challenges, in expanding access to and usage of formal financial services. Focusing on key indicators like account ownership, savings behaviour, investment patterns, and digital financial service adoption, the research reveals an inequality between access and usage. While a high percentage of Sri Lankans have bank accounts, informal savings methods remain prevalent, indicating a potential lack of trust in or understanding of formal financial institutions. Notwithstanding high mobile phone penetration, the adoption of digital financial services, particularly mobile money is low, especially among women, highlighting a significant gender gap. The study concludes that Sri Lanka needs to shift its focus from simply providing access to actively promoting usage of formal financial products, bridging the digital gender divide, fostering financial literacy, and building trust in the formal financial system to achieve true financial inclusion and contribute to sustainable economic development. Key Word: Financial Inclusion, Sri Lanka, Account Ownership, Digital Money
... This, in turn, can facilitate promoting and advancing eco-innovation and sustainable development [7]. However, it is essential to acknowledge that the notion of financial inclusion may possess certain limitations in its ability to foster sustainable development within the framework of economic globalization and climate change [8]. Financial inclusion has the potential to effectively facilitate the accessibility of financial services for rural households, thereby significantly enhancing their economic resilience and fostering sustainable development. ...
This study investigates the interplay between income from natural resources, education, access to financial services, and technological advancements in achieving Sustainable Development Goals (SDGs) 7 and 13 in eight resource-rich countries. Motivated by the global urgency for sustainable practices, this research employs a robust analytical framework to explore short- and long-term interactions among these variables, including panel data analysis, cointegration tests, and asymmetry coefficient estimation. Key findings reveal that income from natural resources is directly linked to increased CO2 emissions, emphasizing the environmental costs of resource exploitation. Conversely, higher education levels are associated with reduced CO2 emissions and ecological footprints, highlighting education’s vital role in environmental sustainability. At the same time, financial inclusion fosters economic growth and contributes to environmental degradation, necessitating regulatory measures. Technological innovation, particularly green technology, is crucial for mitigating environmental impacts. This study uniquely combines these factors to provide empirical evidence of their collective influence on sustainability, filling a gap in existing research. The results suggest that effective governance, environmental education, alignment of financial practices with sustainability goals, and support for green innovation are essential for harmonizing economic development with environmental conservation.
Graphical Abstract
... As a result of this technological development, business environments in the financial sector have begun to employ the use of wireless internet access to support a range of innovative banking services with the aim of improving service relationships (Scornavacca & Hoehle, 2007), economic empowerment and social development. Mobile phones can now facilitate efficient allocation of resources and financial management; increasing formal savings and credits; reducing poverty rate while improving equality (Chibba, 2009). ...
Trust between mobile applications and humans is critical for a successful adoption in our society. This study aims to investigate mobile-banking (m-banking) adoption from an institutional trust (ICT performance and Fraud) and affordable mobile broad band point of view and their impact on m-banking adoption in Ghana. In this paper, we extended the Bass diffusion model using system dynamic approach and incorporated fraud, ICT performance and affordability of m-banking services and their effects on m-banking adoption in Ghana. The model is built using system dynamic methodologies (stock and flows), validated to confirm a real-life m-banking adoption behaviour, and simulated to analyse m-banking adoption response under different scenarios. The result shows that improving ICT infrastructure development, preventing cybercrime and reducing the cost of mobile data have a positive impact on m-banking adoption. However, affordability is the primary determinant of m-banking adoption in Ghana, although it can also be enhanced through tax incentives and policy schemes related to mobile communication technologies. The model currently relies on monetary aspects of ICT infrastructure, cybercrime, and broadband data pricing. However, to enhance the model’s reliability, it could be beneficial to expand its scope to include non-monetary factors and other relevant economic variables.
... Australia, known for its rich mineral resources, offers a compelling case study of the importance of natural resource revenues in shaping financial inclusion. Brazil, marked by income inequality and significant efforts to address it, exemplifies how financial inclusion can be a critical tool for achieving equitable development (Chibba 2009;Ali et al. 2023b). Canada, with its vast and diverse geographical landscape, highlights the importance of access to financial services, especially in remote and indigenous communities. ...
In the contemporary global landscape, understanding the nexus between financial inclusion and natural resource abundance is crucial, especially for resource-rich nations. This study uses diagnostic tests and method of moments quantile regression to examines this interplay across Australia, Brazil, Canada, China, India, Russia, and the United States. We find that achieving financial inclusion is significantly challenging for countries that heavily rely on natural resources. Diversified income sources and equitable wealth distribution are essential to mitigate these challenges. Additionally, we identify a positive correlation between economic development and financial inclusion, highlighting the mutually reinforcing relationship between growth and inclusivity. Our research also reveals a notable link between adopting renewable energy and improving financial inclusion, suggesting that environmental responsibility and financial accessibility are intertwined. Foreign direct investment has nuanced impacts on financial inclusion, adding depth to our understanding. Overall, stable income from natural resources and diversified economic development emerge as key promoters of financial inclusion. These insights advocate for regionally specific policies and lay a solid foundation for future research and informed policymaking that address financial inclusion challenges and advance sustainable development.
... Nesse sentido, para , é imprescindível a criação de mecanismos que permitam o acesso dos mais pobres a fontes de renda sustentáveis. Assim, a inclusão financeira surge como um meio de oferecer soluções incrementais de acesso à renda (Chibba, 2009). ...
O segmento de microfinanças é considerado um mecanismo capaz de proporcionar a inclusão financeira dos mais pobres, geralmente excluídos do sistema financeiro tradicional e, dessa forma, permitir que estes possam empreender e desenvolver atividades autônomas que gerem renda. As microfinanças podem ser consideradas especialmente importantes para o público feminino, uma vez que essa modalidade consegue promover o empoderamento das mulheres. Nesse cenário, faz sentido conhecer quais são as características das Instituições de Microfinanças (IMFs) que privilegiam o acesso das mulheres aos seus serviços. Assim, o objetivo deste trabalho é identificar as variáveis que influenciam o acesso das mulheres a empréstimos em IMFs. Para esse fim, esta pesquisa analisou uma amostra composta por 59 IMFs de todo o mundo com o emprego do Modelo de Regressão Beta (MRB) para dados em painel. Os resultados indicam que a proporção de mulheres gerentes, o tamanho da instituição e a proporção de crédito solidário estão positivamente associados à proporção de mutuários do gênero feminino, enquanto a proporção de mulheres no conselho, modelo de governança e o tamanho médio dos empréstimos apresentam uma relação oposta. Os resultados obtidos neste trabalho podem ser utilizados para instrumentalizar o controle gerencial das IMFs que possuam o compromisso institucional de atender as mulheres.
... This encompasses the provision of savings accounts, credit facilities, insurance coverage, and payment services, along with other financial instruments that facilitate individuals in effectively managing their finances and enhancing their economic welfare. Researchers widely agree that financial inclusion is vital to the economy, as an adequate financial system enables savings, access to credit, investment prospects, financial stability, risk diversification, improved well-being, and decreased income inequality and poverty (Chibba 2014;Chinoda and Kapingura 2023;Hussaini and Chibuzo 2018;Inoue 2018;Lyons et al. 2020;Mallick and Zhang 2019;Sarpong and Nketiah-Amponsah 2022). ...
This study investigates the impact of FinTech adoption on traditional financial inclusion in
22 countries in sub-Saharan Africa (SSA). The study utilizes the World Bank’s World Development
Indicators data and the International Monetary Fund’s Financial Access Survey data. This study
employed Principal Component Analysis (PCA) to construct the dimensions of traditional financial
inclusion and the overall financial inclusion index. Applying the Generalized Method of Moments
estimation technique to annual data spanning from 2004 to 2022, the findings show that FinTech
has a negative and statistically significant effect on the geographic and usage dimensions. However,
it has a positive and statistically significant impact on the demographic dimension and the overall
traditional financial inclusion index. These findings indicate that FinTech does not have a detrimental
impact on traditional financial inclusion, which is contrary to the findings of other studies. Therefore,
in order to enhance the degree of financial inclusion in SSA, it is important for traditional financial
inclusion to effectively utilize FinTech
... According to Chibba (2009), the goal of financial inclusion is to address market obstacles that prevent the underprivileged and poor from having access to financial services. ...
The performance of the National Financial Inclusion Strategy (NFIS) of the Central Bank of Nigeria from 2012 to 2022 was assessed in this paper. The study's specific objectives were to assess the performance of the Central Bank of Nigeria's financial inclusion plan with regard to financial access, financial usage, and extent of financial inclusion. The study employed content analysis, which involves examining earlier works. The study found that financial usage has significantly expanded and that due to technological advancements, several aspects of the plan, such as point-of-sale terminals, are at present not the greatest or optimum channel for offering financial services. The inability of the NFIS to lower financial exclusion to 20% before 2020 was also determined to be a failure. The study concluded that the degree of financial inclusion is still inadequate, especially in the northern regions of Nigeria where religious and cultural variables decreased financial inclusion due to restricted access to financial services. The report suggested that NFIS should work with financial institutions to develop technological and regulatory environments to support the expansion of readily available and reasonably priced digital financial services. The government needs to guarantee that nationwide agent networks quickly expand and that Know Your Customer standards are uniformly applied when opening and managing accounts and mobile wallets across every one of the financial platforms. Since uncontrolled bank fees and charges inflict an unnecessary burden on the most vulnerable members of society, NFIS should develop an atmosphere that is conducive to serving the most excluded.
... En effet, ces institutions contribuent non seulement à fournir des services financiers, mais elles jouent également un rôle essentiel dans la création de réseaux de soutien pour les populations vulnérables, renforçant ainsi leur empowerment économique et social (Koveos & Randhawa, 2004). Cette approche sociale est devenue un pilier fondamental des institutions de microfinance, car elle permet d'atteindre les objectifs de croissance économique tout en répondant aux besoins spécifiques des individus en situation de précarité, ce qui souligne l'importance de l'inclusion financière (Chibba, 2009). Ainsi, nous formulons la première hypothèse de cette étude : H1 -Les IMF adoptant une approche sociale ont un impact plus significatif sur la réduction de la pauvreté. ...
This study examines the ability of microfinance institutions (MFIs) to reconcile financial performance and social utility, a crucial issue in the context of the social economy. A mixed-method approach was adopted, combining conceptual analysis and a field survey of three major MFIs in Casablanca. Data were collected from questionnaires administered to employees and beneficiaries, and analyzed using SPSS v21 software to assess the relationships between financial performance, social impact and MFI professionalization.
The results show that MFIs can balance these two objectives. Employees recognize the importance of social utility while maintaining viable financial practices, and beneficiaries, mostly women in precarious situations, report a positive impact on their living conditions. However, challenges remain, such as the risk of over-indebtedness and the need to improve the adequacy of services.
These findings highlight that the professionalization of MFIs and the integration of rigorous management are essential to maximize their social impact and ensure their financial viability. The study recommends strengthening internal control systems and promoting financial education programs to ensure a sustainable balance between social and financial objectives.
... For instance, Acs, Morck, Shaver, and Yeung (1997) highlighted that multinationals often benefit from substantial financial resources, advanced technology, and economies of scale, which allow them to offer lower prices and better quality products compared to local SMEs. This competitive advantage often results in SMEs struggling to maintain market share, a pattern also noted by Chibba (2009), who found that in Sub-Saharan Africa, large firms' monopolistic behaviors limit market entry opportunities for smaller enterprises. The findings in this study are consistent with Fosu (2013), who argued that in Ghana, the preferential access to government contracts and subsidies for larger firms creates an uneven playing field, stifling competition and innovation among SMEs. ...
Small and Medium Enterprises (SMEs) play a pivotal role in the economic development of emerging economies, yet they face substantial barriers to market entry that can impede their growth and sustainability. This study aims to analyze the major barriers to market entry encountered by SMEs in Ghana and Tanzania and explore the strategic approaches adopted to overcome these challenges. Utilizing a comprehensive literature review, this research synthesizes existing knowledge on entry barriers such as regulatory constraints, access to finance, market competition, and infrastructure deficits. The findings indicate that while both countries face similar obstacles, the intensity and impact of these barriers vary due to distinct economic and policy environments. Moreover, the study identifies successful strategies, including innovation, networking, and capacity building, that SMEs employ to navigate these challenges. By highlighting these barriers and strategies, this study contributes to a deeper understanding of the SME landscape in Ghana and Tanzania, offering insights for policymakers and practitioners to foster a more supportive business environment. The research emphasizes the need for targeted policy interventions to reduce entry barriers and enhance the competitive capabilities of SMEs. Future research should further investigate the dynamic interactions between these barriers and strategies across different sectors.
... Quite notably, the expansion of financial services positively contributes to reducing poverty (Zameer et al., 2020) and enhances access to financial services for low-income households (Chibba, 2009 Mohsin et al. (2022) found that expanding financial services is beneficial for the implementing energy projects and improving energy infrastructure, which ultimately help to reduce EP. ...
This paper investigates the dynamics of energy poverty by evaluating the roles played by financial development, technological innovation, and educational development, among other factors. It seeks to identify pathways for sustainable development in the Belt and Road Initiative (BRI) countries. Based on recent panel data from 2000 to 2020, this research classified the sample into various income groups for a comparative analysis. A multidimensional comprehensive index of energy poverty was then formulated through principal component analysis (PCA). This study assesses the relationships between variables using a novel panel quantile autoregressive distributed lag (QARDL), ordinary least squares (OLS), panel unit root tests, Kao cointegration tests, and Wald tests. The results of the Kao tests confirm the presence of cointegra-tion among the variables across all income groups and the overall sample. The panel QARDL approach indicates a significant and negative long-term relationship between financial development and energy poverty across all income groups other than the low-income countries. Similarly, technological innovation has a negative long-term association with energy poverty for most groups, with the exception being the upper-to-middle-income countries. Furthermore, educational development negatively influences energy poverty in the long term for all groups other than lower-middle-income countries. The findings for the overall sample suggest that financial and educational development are negatively connected with energy poverty in both the long and short term, while technological innovation only has a negative connection in the short term. In addition, the Wald test results revealed time-varying integration and parameter stability in both the long and short terms.
K E Y W O R D S: belt and road initiative (BRI) countries, educational development, energy poverty, financial development, quantile ARDL, sustainable development, technological innovation
... The literature overwhelmingly supports this notion. For instance, Chibba (2009) finds that digital finance provides complementary solutions to promote inclusive development and effectively addresses poverty-related issues. Park and Mercado (2018) examine the impact of financial inclusion on poverty and income inequality globally as well as in Asia. ...
The inclusive development of digital finance has garnered significant public interest recently due to its potential to alleviate relative poverty and stimulate rural revitalization. Based on China Household Finance Survey (CHFS) data in 2015, 2017, 2019, and 2021, this research empirically tests this hypothesis through linear probabilistic modeling. The results highlight that digital financial inclusion significantly reduces both the levels of relative income and asset poverty in China with the effect more pronounced on the former. Findings also confirm the mediating role of family entrepreneurship on the digital financial inclusion and relative poverty nexus. Further investigation reveals a heterogeneous impact across regions, levels of education, and elite groups, whereby the effect tends to be stronger on rural families, non-party member families, those with a low level of education, and in central and west inland regions. This paper therefore advocates that digital finance could serve as a potential strategy to facilitate poverty reduction in China.
The National Financial Inclusion Strategy for the period 2019–2024 outlines India’s vision and key objectives for promoting financial inclusion in the country. This study explores the correlation between financial inclusion and the Sustainable Development Goals (SDGs) and highlights the challenges and opportunities in achieving inclusive financial systems worldwide. The analysis reveals the significance of financial inclusion in poverty reduction, ending hunger, improving health and well-being, advancing gender equality, fostering economic growth, supporting innovation and infrastructure, reducing inequality, and overall sustainable development. The study emphasizes the importance of addressing barriers to financial inclusion, including limited access, low financial literacy, gender disparities, regulatory challenges, technological barriers, and risk management. To advance financial inclusion and accelerate progress towards the SDGs, the study recommends enhancing financial education, expanding access to affordable financial services, fostering public–private partnerships, implementing supportive regulatory frameworks, and promoting digital financial inclusion. By implementing these recommendations, stakeholders can empower individuals and communities, bridge the financial inclusion gap, and contribute to sustainable development globally.
This study investigates the relationship between digital financial inclusion and income inequality across rural districts in India from 2015 to 2023. Employing a mixed-methods approach, we develop a novel Composite Digital Financial Inclusion Index (CDFI) and use spatial econometric techniques to analyse data from 500 rural districts. Our findings reveal a significant negative relationship between digital financial inclusion and income inequality, with notable regional variations. A one-unit increase in the CDFI is associated with a 0.243 decrease in the Gini coefficient, considering both direct and spillover effects. The strongest impact is observed in Western India, while the weakest is in the Eastern region. Qualitative insights from 50 key informant interviews highlight the crucial role of cultural norms, infrastructure and financial literacy in shaping the effectiveness of digital financial services. The study also uncovers potential risks, such as over-indebtedness, associated with increased access to digital financial services. Our results underscore the need for tailored, context-specific approaches to digital financial inclusion initiatives and emphasise the importance of complementary investments in infrastructure and financial literacy to maximise the potential for reducing income disparities in rural India.
JEL Codes: O18, I32, D31, C21
Purpose: Pricing transparency has long been advanced as a critical client protection measure in microfinance. It is also regarded as an important mechanism to drive interest rates downward by addressing information asymmetries and empowering clients to make informed choices, thereby increasing competition between providers. The need for clear pricing has become even more pronounced as institutions struggle to regain financial sustainability in the aftermath of the pandemic and as digital credit proliferates. Yet, little is known about its antecedents, especially institutional characteristics and country contextual factors.
Study design: In this paper, we investigate the relationship between microfinance institution (MFI) characteristics (i.e., profit status, religious affiliation, social vs. commercial orientation), as well as macro context factors (i.e., country level financial market structures, financial literacy), and pricing transparency. We use data collected through MFTransparency.org and test our hypotheses using 517 unique microfinance institutions.
Findings: We find that for-profit MFI’s and those with stronger commercial orientations price more transparently, but there is no significant difference between faith-based and secular institutions. We also find that institutions that belong to an external reporting agency (i.e., The MIX Market) and that operate in countries with higher levels of financial literacy and deeper financial markets price more clearly.
Contributions: Our research sheds light on characteristics that are likely to belong to institutions with more transparent pricing and on the importance of country financial context.
Implications: While commercialization in microfinance is often associated with negative effects on social outcomes, the finding that for-profit MFIs tend to be more transparent in pricing should be considered by policy makers, donors and investors. Attempts to reduce the influence of pecuniary motives in microfinance, whether by regulation or funding decisions, must be carefully weighed and precisely targeted. Moreover, the importance of contextual factors implies that institutions that are committed to favorable client outcomes should join external reporting agencies and increase their efforts to enhance client financial literacy.
This study examines the impact of ICT adoption on multidimensional poverty reduction in rural Bangladesh, focusing on Jessore Sadar Upazila. Using primary survey data from 200 households, we employ an endogenous switching regression (ESR) model to address selection bias and a Probit model to identify determinants of ICT adoption. Probit results reveal that higher education, monthly mobile usage, remittance inflows, and prior digital service usage significantly drive ICT adoption, while age marginally reduces uptake. ESR estimates demonstrate that ICT adopters exhibit a 41.5% lower multidimensional poverty score, driven by improved market access, reduced transaction costs, and stronger community networks. However, education paradoxically correlates with higher non-income deprivation among adopters, suggesting trade-offs in resource allocation. The findings underscore ICT's role in mitigating spatial disadvantages in geographically isolated households, particularly in agriculture-dependent communities. Policy implications emphasize expanding digital literacy programs for older populations, leveraging mobile infrastructure, and integrating ICT into rural financial systems to amplify poverty-reduction benefits. This study provides robust empirical evidence for targeted ICT interventions to address multidimensional deprivation in Bangladesh.
This study examines how the interaction between access to credit and new fintech ventures evolved during and after the COVID-19 pandemic by conducting three different lexicon-based sentiment analyses using NLTK, TextBlob, and Flair Python libraries. We previously gathered data from Twitter (subsequently rebranded as X) by applying different combinations of keywords in our scraper script to better understand the phenomenon and enhance the quality of the final dataset. We defined the most appropriate set of keywords that we subsequently used for analysis. We also empirically estimated whether the results obtained could be generalized to the continents involved. Although the keywords “access to credit” and “fintech” show a slight decrease in tweets at the end of the COVID-19 pandemic, we obtain meaningful insights at the continent level concerning variations in sentiment over the analyzed period. Furthermore, the most recurrent keywords show significant correlations.
Financial education is a key driver of youth empowerment,
equipping young individuals with the skills and knowledge to make
informed financial decisions, manage personal finances, and build
wealth. In an increasingly complex financial landscape, financial
literacy is essential for navigating financial systems, understanding
investments, budgeting, and planning for long-term financial goals.
In countries like India, where youth represent a large portion of the
population, financial education is crucial for promoting economic
independence, reducing reliance on debt, and fostering a culture of
saving and investment.By empowering youth with financial
education, they are better prepared to manage resources effectively,
avoid financial pitfalls, and take advantage of opportunities such as
entrepreneurship, investment, and wealth creation. Financially
educated youth are more likely to engage in responsible financial
behaviors, contribute to their families’ well-being, and make positive
contributions to the economy.
Keywords: Financial Inclusion, Wealth Building, Youth
Development, Economic Resilience.
In increasingly dynamic and unpredictable financial environments, individual investment decisions are often shaped not solely by rational analysis, but by cognitive and emotional influences known as behavioral biases. Traditional financial theories based on market efficiency and rational actors struggle to fully explain investor behavior during periods of market volatility and economic turbulence. Behavioral finance, by contrast, offers a nuanced understanding of how biases such as overconfidence, loss aversion, herding, mental accounting, and recency effect systematically affect judgment and risk assessment. This paper explores how these biases manifest during different phases of economic cycles and in the face of market volatility, leading to suboptimal investment decisions, wealth erosion, and increased exposure to systemic risk. During bull markets, overconfidence and optimism bias can drive excessive risk-taking and speculative behavior, while in bear markets, fear-based responses such as loss aversion and panic selling dominate. Economic downturns often amplify herd behavior, prompting individuals to follow market sentiment despite contradicting fundamentals. The paper also examines demographic and psychological factors-such as age, financial literacy, and personality traits-that moderate the influence of behavioral biases. It integrates empirical data from behavioral economics and financial psychology to highlight recurring patterns and inconsistencies in investor decision-making. Finally, it presents strategies to mitigate the impact of such biases, including investor education, decision aids, and algorithm-based advisory systems. Understanding these behavioral dimensions is essential for policymakers, financial advisors, and individual investors alike, particularly in the context of global financial uncertainty. By addressing these psychological factors, stakeholders can promote more resilient investment behavior and financial stability across market cycles.
This study examines the impact of social financial grants on poverty alleviation in rural Indonesia, using a demographic perspective and econometric analysis. By utilizing first‐hand survey data from various rural districts, the research investigates the effectiveness of these grants in improving household income, reducing poverty rates, and promoting economic stability. The study employs econometric tools such as regression analysis, difference‐in‐differences (DiD), and propensity score matching (PSM) to assess the causal relationship between social financial grants and poverty alleviation. The findings provide insights into the demographic factors influencing the effectiveness of these grants and offer policy recommendations to enhance their impact on rural poverty in Indonesia.
As of the end of May 2021, more than 170 million people worldwide were infected with COVID19, with the total death toll exceeding 3.7 million. The COVID-19 pandemic and the demand for physical distancing and social isolation have highlighted digital financial services (DFS) as a typical solution for getting the basic services we need in our daily lives. Thus, to understand the behavior of people using digital financial services during a pandemic, in particular in developing countries,
we used the UTAUT model, expanding it with two constructions: fear of COVID-19 as a moderator and social isolation as a direct determinant for behaviour intention. A survey method is used, in which primary data is collected through survey platforms and social networks from people from developing countries, more than 400 participants aged 18 and over. This study uses structural equation modeling (SEM) to test our constructs and hypotheses, analyze relationships, and determine the overall fit of the model. The study used factor analysis (EFA, CFA) and covariancebased SEM. As a result, we found that all UTAUT constructs and social isolation positively influence behavioral intent and actual use of DFS during a pandemic. Testing the moderating role of COVID fear for other constructs plays a positive role, with the exception of the relationship between expected performance and behavior intensity and the relationship between behavioral intent and actual use.
This study investigates the impact of financial inclusion on the performance of commercial banks in 10 Asian countries (including both developed and developing countries) from 2008 to 2021 by measuring the probability of impact using Bayesian methods. Financial inclusion is processed through PCA (Principal Component Analysis). The results show that financial inclusion has a negative impact on bank performance in the studied group of countries. However, when analyzing specific groups of countries based on per capita income criteria below 5,000, the results indicate that in countries with per capita income below $5,000, expanding branch networks negatively affects the performance of commercial banks, but increasing the number of ATMs helps improve the performance of commercial banks. In contrast, in countries with high per capita income such as Japan, South Korea, and Singapore, expanding branches or increasing the number of ATMs negatively impacts ROE (Return on Equity), while the number of bank branches positively affects ROA (Return on Assets), and the number of ATMs negatively affects ROA. These findings suggest some policy implications for making financial inclusion more effective in impacting commercial banking performance, tailored to the economic and social characteristics of each country.
This special edition consists of a selection of excellent academic contributions that were developed into full journal articles by presenters who delivered their key findings at the 1st Banking, Competition & Corporate Law (BCCL) Colloquium held at the Faculty of Law, North-West University, on 6-7 July 2023. These contributions were developed into articles, subjected to a rigorous double-blind peer review process to determine their quality, and subsequently accepted for publication in the Potchefstroom Electronic Law Journal (PELJ).
Several studies have explored the relationship between environmental degradation and economic growth or financial development and green technology using panel data. However, most of these studies have not considered the impact of financial developments and institutional quality in individual countries using time series data. This study explores how financial development-encompassing factors such as broad money, domestic credit to the private sector, foreign direct investment (FDI), and green technological innovation-affects carbon emissions in India, using data from 2001 to 2023. Utilizing sophisticated econometric techniques including the NARDL model and robustness checks through FMOLS and DOLS models, the research reveals that financial development can have a dual impact. On one hand, well-structured financial
Blockchain is a distributed digital ledger system that has evolved through first- and second-generation networks, leading to the rise of cryptocurrency and smart contracts. Cryptocurrency has enabled fundraising mechanisms like initial coin offerings (ICOs) and security token offerings (STOs) whereas smart contracts offer the potential to transform traditional legal frameworks. Blockchain networks are customizable, allowing operators to choose privacy and accessibility levels. Consensus mechanisms allow users to commit to networks, with different models suited to various blockchain features. The trustless nature of blockchain makes it an ideal technology for fostering public trust in financial institutions. The socio-economic benefits of blockchain include enhancing social solidarity through decentralization, as advocated by Adam Smith, and reducing transaction costs by curbing opportunistic behaviors in contracts. However, for blockchain to realize its full potential, it must challenge existing systemic forces through Schumpeter’s concept of creative destruction, reaching a tipping point for mass adoption and promoting financial inclusion.
Google Pay has made significant strides globally, transforming how consumers conduct purchases and manage their finances. It boasts over 150 million users across 40 countries, with widespread adoption driven by its user-friendly interface and extensive features. Google Pay’s partnerships with local financial institutions, NGOs, and community leaders have promoted financial inclusion, particularly in underbanked and underserved communities. It has been instrumental in promoting the Unified Payments Interface (UPI), which has revolutionized digital payments in India and is being expanded to other countries. Despite Google Pay’s efforts to expand its services to underbanked populations, it faces significant challenges in promoting financial inclusion especially among nomadic communities. Nomadic marginalized communities are groups of people who lead a nomadic lifestyle, moving from place to place without a permanent home, and often face significant social and economic disadvantages like limited internet connectivity, digital literacy, and the transient nature of their lifestyle. Despite these obstacles, this case explores how Google Pay overcomes the challenges in digital payment systems like mobile wallets and digital currencies have the potential to significantly improve financial inclusion by providing access to banking services for the unbanked and underbanked population. Google Pay deals with nomadic marginalized communities to promote financial inclusion and economic empowerment. By providing tailored financial services, digital literacy programs, and improved internet connectivity, Google Pay helps these communities access essential financial tools, participate in the economy, and build resilience against economic challenges.
Henri Fayol's management principles shape the economic and social effects of fair wages and provide a basis for increasing organizational efficiency. Fair pay increases labor productivity by enhancing employee motivation and commitment. Social equality ensures social peace by reducing inequalities in income distribution and forms the basis of an inclusive economic model, supporting the participation of low-income groups in economic activities. It is important for policymakers to develop legislation to implement fair wage policies and incentivize employers to implement Fayol's principles. These approaches have the potential to increase not only the productivity of organizations but also the welfare of society. Ultimately, the macroeconomic effects of fair wage will lay the foundations for sustainable economies of the future.
This study aims to explore the themes of “Fintech” and “Financial Inclusion” since their inception using bibliometric analysis and pave the way for future research agenda.
The Global Findex Database of World Bank (2021) reports that India has highest share of inactive transaction accounts. Inspite of considerable efforts by government to promote financial inclusion especially in rural and underserved areas these accounts remain inactive. The aim of this current research is to discover the factors that promote the active utilization of transaction accounts. For this the study analyses the existing determinants of financial inclusion and recommends new determinants to augment the effectiveness of financial inclusion programs. The research is designed as a cross-sectional study of rural households involving data collection from a survey schedule. The method of analysis involves both theorizing on the findings from a previous framework for financial inclusion and deriving policy implications for better coverage of the financially excluded population. The study highlights the significant contribution of quality and availability factors towards ensuring effective financial inclusion. The study found that availability fully mediates the relationship between accessibility and usage. The findings confirm the positive and significant influence of effective financial inclusion on the socioeconomic progress of rural households.
As stated in the Sustainable Development Goal (SDG) 8.10 of the UN’s Agenda 2030, financial inclusion is a crucial piece of the puzzle for achieving economic empowerment. Financial inclusion allows people to manage risks, invest in their future, and build businesses (Ade’Soyemi et al., 2020). The UN’s SDG 8.10 targets financial inclusion, a critical economic empowerment aspect (Baffoe et al., 2021). This goal recognizes that financial services like banking, insurance, and credit are essential for full economic participation (Rai et al., 2019). SDG 8.10 calls on countries to strengthen their financial institutions to serve all citizens better. Achievement of this goal involves expanding access to bank accounts and digital financial services, creating financial products for low-income people and improving financial literacy and consumer protection. By promoting financial inclusion, countries can work toward reducing poverty and building a sustainable global economy.
This study aims to analyze the influence of financial education on the financial literacy of the millennial generation. Millennials face increasingly complex financial challenges as access to digital financial products and consumptive lifestyles increases. Good financial literacy is needed so that they are able to make wise financial decisions, save, and invest for the future. This study uses a quantitative approach by collecting data through a survey involving 121 millennial respondents who have participated in financial education programs. Data analysis was carried out using SPSS version 25 software and linear regression methods to test the relationship between financial education and financial literacy levels. The results of the study show that financial education has a significant positive influence on millennial financial literacy. These findings underscore the importance of financial education programs in improving the financial understanding of millennials so that they are better prepared to face complex financial decisions. This research is expected to be a reference for policymakers and educational institutions in designing more effective financial literacy programs to support the financial well-being of the millennial generation.
The Sustainable Development Goals provide the framework for constructing a more sustainable and better future for everybody. The environment, inequality, economic expansion, climate change, poverty, justice, and peace are some of the topics they address. The UN General Assembly, on September 25, 2015, adopted both the 2030 ‘Agenda for Sustainable Development’ and the ‘Sustainable Development Goals’. All 193 of the General Assembly’s members, both developed and developing, have endorsed the agenda, which applies to all states. Despite the fact that the global goals do not specifically address financial inclusion, widespread financial services availability is a crucial facilitator for several goals. With 17 SDGs that support economic growth, sound foundations are necessary for economic progress. Sound economic development includes several key elements, including universal accessibility to financial and insurance services, new technologies, readily available bank loans, and improved resource allocation. Early in the 1990s, India made a significant step forward by liberalizing its economy, and in the 2000s, India made more progress toward economic justice and social improvement by implementing a range of financial inclusion policies and programs. Any program to promote financial inclusion should have a healthy economy as both a precondition and a goal. Financial inclusion models can support both the achievement of more fundamental development goals and the growth of the economy as a whole. The distribution of financial services to underprivileged populations has been greatly aided by digital finance, whether through the use of personal computers, the internet, mobile phones, or cards connected to trustworthy Digital Payment systems. The article’s goal is to examine in what way financial inclusion (FI) contributes to the accomplishment of Sustainable Development Goals (SDGs), as well as the influence of digitalization on the same.
Using data from a survey of clients of a microfinance bank, Khushhali Bank, in 2005, the study revisited the survey data and found that despite the Bank’s strict poverty-targeting program used in client selection and despite the survey’s design to address the selectivity bias, the selectivity bias indeed still existed in the sampled households. Propensity Score-Matching Methods (PSM) are used to address the selectivity bias. [DP 104].
This article considers the South African black economic empowerment (BEE) programme, with an emphasis on the sector charters in mining and finance, to investigate the extent to which these developments may be characterised in terms of collaborative governance. It argues that the genesis and content of the charters do represent important elements of collaborative governance, including a reliance on interest-based negotiation and an expectation that business contributes to the public benefit as good corporate citizens. But underlying these elements have been more powerful drivers related to power-based bargaining, whereby international investors have emerged as key, albeit ill-defined, stakeholders in South Africa's post-apartheid transition. The role of corporate citizenship has been limited, despite efforts by business to portray the outcomes and agreements in terms of business voluntarism and enlightened self-interest. The article thus re-emphasises the role of the state in defining and enforcing a social role for big business. It raises concerns that the BEE programme charters prejudice more fundamental socio-economic transformation in the interests of the established corporations, and it calls for more research on how BEE is being implemented.
ABSTRACT‘Black Economic Empowerment’ (BEE) has been a major policy thrust of the democratic governments in South Africa since 1994 in attempting to redress the effects of apartheid. In this article, we explore the historical precedents to BEE in South Africa, review the different steps taken in promoting it, and assess some of its outcomes to date. We argue that BEE can take only limited forms because of the economic policy constraints in which it has been incorporated. Moreover, these forms have an increasingly managerial logic that further restricts what can be achieved. Short of a major shift in conceptions of — and policy for — BEE, meaningful ‘empowerment’ is unlikely to take place.
The lack of credit is often mentioned as one of the major constraints facing small businesses. We use differences in the phasing in of a new lending program designed to serve clients of the largest snack food company in Mexico to identify the impact of credit on outcomes of small retail enterprise in Mexico City. We find that the loans have positive impacts on the smallest firms but negative impacts on larger firms. These results are consistent with hypotheses that smaller firms have higher returns to capital and face greater credit constraints. Given that the program involved loans given for 4-month terms, we find surprisingly large effects on investment in fixed assets.
There has been an unprecedented political focus on economic development and poverty reductions since the Gleneagles Summit of 2005, yet it seems economists have been unable to agree on how to capitalise on the opportunity. Is more aid the solution? Or the problem? This article argues that, beyond the headline-grabbing generalities, development economists are building up a detailed body of empirical evidence specific to individual countries which will shape more effective policy interventions in the years ahead. As in many other areas of applied economics, there is a quiet revolution in what economists know and consequently in their policy advice.
A study was performed to determine the specific channels through which financial development affects hunger. The study covered more than 50 countries between 1980 and 2003. Three relationships were analyzed: between financial development and overall agricultural productivity; between agricultural productivity and nourishment; and between financial sector development and investment in agricultural equipment. As part of a second round of testing, financial sector development was related to other productivity measures, checked whether cereal yield related positively to undernourishment and explored whether financial sector development relates to the use of two productivity-enhancing inputs. First, evidence to support the causal link between private credit and agricultural productivity was found. Second, a causal relationship between value added per agricultural worker and undernourishment was observed. Finally, there was also evidence to support the important causal link between the financial sector and investment in agricultural equipment.
Post-apartheid South Africa is characterized by centralized, neo-liberal policymaking that perpetuates, and in some cases exaggerates, socio-economic inequalities inherited from the apartheid era. The African National Congress (ANC) leadership's alignment with powerful international and domestic market actors produces tensions within the Tripartite Alliance and between government and civil society. Consequently, several characteristics of 'predatory liberalism' are evident in contemporary South Africa: neo-liberal restructuring of the economy is combined with an increasing willingness by government to assert its authority, to marginalize and delegitimize those critical of its abandonment of inclusive governance. A new form of oli- garch power, combining entrenched economic interests with those of a new 'black bourgeoisie' promoted by narrowly implemented Black Economic Empowerment policies, diminishes pro- spects for broad-based socio-economic transformation. Because the new policy environment is failing to resolve tensions between global market demands for increasing market liberalization and domestic popular demands for poverty-alleviation and socio-economic transformation, the ANC leadership is forced increasingly to confront 'ultra-leftists' who are challenging its credentials as defender of the National Democratic Revolution which was the cornerstone in the anti-apartheid struggle.
This work offers a preliminary review of women's financial insecurity and financial literacy in the Asia Pacific community. The report also offers perspective on the value of financial education as a device both for promoting individual security and for encouraging the economic development of the region.
Discretionary monetary policy for small emerging market economies, especially in Sub-Saharan Africa, can benefit from closer scrutiny and strengthening through appropriate and incmacfemntal policies. Field research and related analysis challenge the conventional wisdom on the relationship between interest rates and inflation. Lessons learned suggest that monetary policy needs to be tempered to prevailing social, cultural, and socio-economic factors. In addition, access to credit through financial inclusion policies and programmes needs to be addressed, and the overarching role of good governance cannot be overlooked. Given the broad scope of weaknesses inherent in monetary policy-making (and the systems that support it) in small emerging market economies such as Botswana's, two options are available to tackle the problems: either monetary union should be adopted or incmacfemntal new directions to the status quo are required.
Expanding access to commercial credit is a key ingredient of financial development strategies. There is less consensus on whether expanding access to consumer credit helps borrowers, particularly when loans are extended at high interest rates. Popular skepticism about "unproductive," "usurious" lending is fueled by research highlighting behavioral biases that may induce overborrowing. We estimate the impacts of expanding access to consumer credit at a 200% annual percentage rate (APR) using a field experiment and follow-up data collection. The randomly assigned marginal loans produced significant net benefits for borrowers across a wide range of outcomes. There is also some evidence that the loans were profitable. The Author 2009. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oxfordjournals.org, Oxford University Press.
The article examines the contribution of financial development to poverty reduction in developing countries. Building on earlier research which has established links between financial development and economic growth, and between economic growth and poverty reduction, the article tests for a causal process linking financial sector growth and poverty reduction. The empirical results indicate that, up to a threshold level of economic development, financial sector growth contributes to poverty reduction through the growth-enhancing effect. The impact of financial development on poverty reduction will be affected, however, by any change in income inequality resulting from financial development.
Botswana is at a crossroads, as economic growth has slowed significantly in recent years while social problems remain largely unresolved. Exacerbating this situation is a monetary policy in crisis as over a decade of generally high interest rates have failed to address inflationary pressures. Thus, the Botswana experience challenges generally accepted wisdom on the relationship between interest rates and inflation. The main lessons learned highlight the need for (i) enhancing the knowledge and information base; (ii) tempering monetary policy to prevailing mores; and (iii) ensuring the provision of good governance at the central bank. Policy and programme recommendations that are offered are relevant not only to Botswana but also to other developing countries that face similar challenges.
Expanding access to commercial credit is a key ingredient of financial development strategies. There is less consensus on
whether expanding access to consumer credit helps borrowers, particularly when loans are extended at high interest rates. Popular skepticism about “unproductive,”
“usurious” lending is fueled by research highlighting behavioral biases that may induce overborrowing. We estimate the impacts
of expanding access to consumer credit at a 200% annual percentage rate (APR) using a field experiment and follow-up data
collection. The randomly assigned marginal loans produced significant net benefits for borrowers across a wide range of outcomes.
There is also some evidence that the loans were profitable.
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Article IV Consultation
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Taking Action for the World's Poor and Hungry People: A Way Forward
- Ifpri
Financial Inclusion and Development: Concepts, Lessons Learned and Key Pillars
- M Chibba
Financial education: The next training frontier. Microenterprise Americas, Fall
- Idb
News Release: Dakar Conference on Financial Access for the Poor Opens to Widespread Optimism and Support, United Nations Capital Development Fund (UNCDF)
- Uncdf
Financial Literacy. London: National Foundation for Educational Resources (NFER)
- Nfer