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on Financial Literacy and Education |
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Issue of 2020‒10‒19
four papers chosen by |
| By: | Enes Sunel |
| Abstract: | Having access to credit is essential for households to address the volatility of their personal finances over time and for firms to fund their investments. Accessing financial services at affordable cost on the other hand, is crucial to ensure financial security of all economic units. Despite recent improvements, there are still large financial inclusion disparities in Costa Rica, notably across regions, by gender, and size of firms. This paper discusses policy reforms that would reduce these disparities. Some of the key policy priorities are to improve transparency by strengthening the credit registry and allocating the development banking credit more effectively. Enhancing financial literacy could help avoid excessive consumer indebtedness. Technological innovation would also help Costa Rica: granting FinTech start-ups direct and full access to the state-of-the-art electronic payments system would increase competition, reduce transactions costs and ensure financial inclusion for all. |
| JEL: | D18 A G2 O32 |
| Date: | 2020–10–08 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1623-en&r=all |
| By: | McLaughlin, Eoin; Pecchenino, Rowena A. |
| Abstract: | The turbulent 1830s saw a sequence of great political and social reforms in the UK. One such reform was the introduction of a locally funded poor law in Ireland. The development of a nascent welfare system in 1838 coincided with a boom in the formation of microfinance institutions in Ireland. The focus of this study is the expansion of a hybrid organisational form, Loan Fund Societies (LFSs), in the ten years prior to the Great Irish Famine of 1845-49. LFSs were legally established with a conflictual structure: balancing acting as commercially viable charitable institutions that were required to provide credit to the deserving poor to enable them to be self-sufficient, while dedicating their "profits" to supporting the indigent poor. This study uses an analytical framework drawing inspiration from institutional logics to explore and better understand Irish microfinance in the early nineteenth century, a period of profound socio-economic and socio-religious change. It seeks to explain the factors that motivated the establishment and de-establishment of microfinance institutions amidst this tumult. Legislative changes in LFS business parameters in 1843 made the tensions between being charitable and commercial sustainability salient and, for some, continued existence untenable. |
| Keywords: | microfinance,institutional logics,development,Ireland |
| JEL: | G21 H75 I38 N23 N33 N83 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:qucehw:202008&r=all |
| By: | Brixiova, Zuzana (University of Economics Prague); Kangoye, Thierry (African Development Bank); Yogo, Urbain Thierry (World Bank) |
| Abstract: | In the past decade inclusive growth, that is job-rich growth, has topped the policy agenda in developing countries. This paper investigates how the access to finance affects employment in small and medium-sized enterprises (SMEs) in Sub-Saharan Africa. It first presents a model where firm creation requires entrepreneurial search and paying the start-up costs, while the firm's size in terms of employment depends on the access to credit. Under the financial market imperfections, access to credit can be a binding constraint on firm entry and employment even when the banks have sufficient liquidity. Using an impact evaluation-based approach on firm-level data from 42 African countries, we show that SMEs with access to formal financing create more jobs than firms without access, with employment in firms having access to more affordable and larger loans growing the fastest. The impact of access to finance is stronger for firms in manufacturing than in services, pointing to sectoral targeting of finance as a possible policy supporting industrialization. |
| Keywords: | entrepreneurship, financial inclusion, employment, propensity score matching |
| JEL: | L2 G2 D22 C1 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13708&r=all |
| By: | Brixiová, Zuzana; Kangoye; Thierry; Yogo, Thierry Urbain |
| Abstract: | In the past decade inclusive growth, that is job-rich growth, has topped the policy agenda in developing countries. This paper investigates how the access to finance affects employment in small and medium-sized enterprises (SMEs) in Sub-Saharan Africa. It first presents a model where firm creation requires entrepreneurial search and paying the start-up costs, while the firm’s size in terms of employment depends on the access to credit. Under the financial market imperfections, access to credit can be a binding constraint on firm entry and employment even when the banks have sufficient liquidity. Using an impact evaluation-based approach on firm-level data from 42 African countries, we show that SMEs with access to formal financing create more jobs than firms without access, with employment in firms having access to more affordable and larger loans growing the fastest. The impact of access to finance is stronger for firms in manufacturing than in services, pointing to sectoral targeting of finance as a possible policy supporting industrialization. |
| Keywords: | entrepreneurship,financial inclusion,employment,propensity score matching |
| JEL: | L2 G2 D22 C1 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:665&r=all |