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on Financial Literacy and Education |
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Issue of 2020‒10‒12
five papers chosen by |
| By: | Amrita Chatterjee (Assistant Professor, Madras School of Economics); Simontini Das (Assistant Professor, Jadavpur University, Kolkata: 700032) |
| Abstract: | Financial Inclusion has its primary objective in providing access to useful and affordable financial products and services that meet the needs of so far unbanked population for transactions, payments, savings, credit and insurance in a responsible and sustainable way. The penetration of banking services in India has made reasonable progress though there are still regional disparities with especially the rural and female population lagging behind. However, not only access but also usage of financial services matters. Moreover, as there is a strong initiative towards digitalized cashless economy in India, it is important to examine whether the country is ready for a more technology-driven financial system. As far as the diffusion of telecommunication technology is concerned, India has made a remarkable progress in urban areas giving rise to significant digital divide between rural and urban India. With spread of mobile and mobile internet though, this divide has come down to some extent. Thus if this inclination towards mobile technology can be properly channelized to improve the access as well as usage of financial services through spread of mobile banking then more and more people can be brought under the purview of institutional credit system leading to reduction in poverty and inequality. The current paper intends to study the role of information and communication technology (ICT) diffusion in improving the status of financial inclusion across the different states of India. Two separate indices for Financial Inclusion and Information Technology Diffusion are formed and the states are clustered to club the states similar in terms of their performance. Then the paper tries to test whether ICT diffusion is one of the indicators of Financial Inclusion in India. The dynamic panel data analysis helped us to identify the role of technology as well as other socio-economic factors which can contribute in interstate disparities in FI. The results show that technology does play an important role in improving financial inclusion. As the elderly people in rural as well as urban areas are still not that familiar with mobile and internet, they may not be able to get benefited by ICT revolution. But lack of education and more importantly poor status of financial literacy play a very vital role in FI |
| Keywords: | Financial Inclusion, Information and Communication Technology Diffusion, Dynamic Panel Data Model |
| JEL: | L86 L96 C23 G21 |
| URL: | http://d.repec.org/n?u=RePEc:mad:wpaper:2016-178&r=all |
| By: | Mirpourian, Mehrdad |
| Abstract: | Well-designed financial products improve the overall financial health of users. The design of products is particularly important for low-income customers, for whom product design drives behavior. In this paper, we offer insights on low-income customers’ savings behavior and on how they use their savings accounts. More specifically, we focus on detecting and measuring the effects of a set of explanatory variables on transaction amount. To do so, we use quantile regression (QR) and apply it to a novel dataset collected from a financial institution in Nigeria. The data show individual transactions made using the account over time, along with additional socioeconomic information on each customer. Using these data, we specify a model that incorporates customer age, account age, location, transaction type, gender, and seasonality effects, evaluating their correlation with transaction size. With the QR model, we are able to study the effect of the explanatory variables within each quantile of transaction amount instead of just showing trends on average. This is the first study to examine transaction size among low-income customers through a gender lens using QR. All of the variables incorporated in this model have a significant effect on transaction size. However, among all of the explanatory variables, the season in which a customer places a transaction (seasonality effect) has the largest impact on predicting transaction amounts. |
| Keywords: | Financial Inclusion, Behavioral Finance, Savings, Quantile Regression, Nigeria |
| JEL: | D03 |
| Date: | 2020–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:103221&r=all |
| By: | María José Roa (Investigadora del Instituto de Investigaciones Económicas y Sociales Francisco de Vitoria); Alejandra Villegas (Investigadora de Universidad Iberoamericana Ciudad de México); Ignacio Garrón (Consultor indpendiente) |
| Abstract: | This paper evaluates the imposition of caps on microcredit lending rates through directed credit policies for productive sectors. This financial inclusion intervention provides a unique quasi-experiment, allowing to estimate its causal effect following a difference-in-differences analysis. Our results suggest that the imposition of interest rate ceilings negatively affected the portfolio balance of new microcredits and loans to SMEs granted by MFIs. Particularly, we find robust results indicating that the balance of the microcredit and SME loans portfolio granted by MFIs, relative to the company portfolio granted by banks, decreased by 26.1% for an average MFI for the period 2011-2018. |
| Keywords: | Interest rate ceilings, financial inclusion, credit access, microcredit loans, small and medium enterprises loans . |
| JEL: | G18 G28 G38 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:adv:wpaper:202003&r=all |
| By: | Amrita Chatterjee (Assistant Professor, Madras School of Economics); Nitigya Anand (Associate Solution Advisor, Deloitte & Touche Assurance and Enterprise Risk Services India Pvt. Ltd.) |
| Abstract: | There have been enough evidences to accept that Financial Inclusion (FI) and Information and Communication Technology (ICT) play positive role in economic growth, even though there are some exceptions. Moreover, we cannot deny the fact that ICT like mobile phone and internet penetration can strengthen the inclusiveness of formal banking sector. The present study has first examined whether ICT development can be an important determinant of Financial Inclusion by using a fixed effect panel data model. The results show that ICT is indeed an important determinant of FI. The same panel data of 41 countries was then used to test whether the growth process of the countries are influenced by Financial Inclusion and ICT diffusion in a dynamic Panel Data Model. Further the paper has investigated the role of FI powered by a better ICT penetration in fostering the growth of the nations using system GMM method by incorporating interactions between FI and ICT indicators. The results suggest that both FI and ICT individually and together through their close interaction can improve current year’s growth. However, we need education, awareness and technical assistance to get sustained growth. |
| Keywords: | Financial Inclusion, Growth, Information and Communication Technology, Dynamic Panel data model, System GMM estimator |
| JEL: | L86 L96 C23 O0 G2 |
| URL: | http://d.repec.org/n?u=RePEc:mad:wpaper:2016-165&r=all |
| By: | Marta Angelici; Daniela Del Boca; Noemi Oggero; Paola Profeta; Maria Cristina Rossi; Claudia Villosio |
| Abstract: | We explore the role of financial and pension information in increasing women’s knowledge and awareness of their future pension status, and consequently, in reducing the gender pension gap. A representative sample of 1249 Italian working women were interviewed to assess their knowledge about pensions and financial issues and about their own savings and personal wealth planned for retirement. The responses showed that their knowledge and awareness of retirement planning was limited. We then ran a randomized experiment to evaluate the effect of increased information regarding pensions on women’s awareness, knowledge, and behaviors. Women in the treated group were provided information in the form of three short online tutorials. A follow-up survey shows that these women became more interested and aware of pension schemes and retirement options after completing the tutorials and were more likely to be better informed and keen to obtain further information. When looking at changes in behavior, we find that treated women who are closer to retirement are more likely to believe that they would make different work-life decisions if they received specific pension information in a timely fashion. They are also more likely to have a supplementary pension fund if they are concerned about their standard of living after retirement. |
| Keywords: | women, pension, savings, financial education |
| JEL: | H31 J22 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8563&r=all |