Financial inclusion, land title and credit: evidence from China

2020 ◽  
Vol 12 (2) ◽  
pp. 257-273
Author(s):  
Meishan Jiang ◽  
Krishna P. Paudel ◽  
Donghui Peng ◽  
Yunsheng Mi
Keyword(s):  
Design Methodology ◽  
Financial Inclusion ◽  
Content Type ◽  
Inverse Probability ◽  
Rural Credit ◽  
Inverse Probability Weights ◽  
Land Title ◽  
Land Titling ◽  
Doubly Robust ◽  
Rural Credit Market

Purpose The purpose of this paper is to study land title’s credit effect from a financial inclusion perspective in China. The focus is both small land holding and poor farmers. Formal and informal finances are considered to test their differences in land title’s credit effect. Design/methodology/approach The authors use augmented inverse-probability weights of the doubly robust method to test the effect of land titling on the rural credit market by addressing self-selection, endogeneity and heterogeneity concerns. Findings Results show that the poor, non-poor and small land holders with land titles are willing to borrow more from formal financial institutions. Land titling increases loan accessibility for non-poor and small land holding farmers. As for informal financing, large land holding and non-poor farmers show a decrease in informal lending. Land titling has a financial inclusion effect for some farmers, but poor farmers’ credit restrictions are not entirely solved by land titling. Originality/value This is the first study that focuses on the financial inclusion effect of farm land titling in China.

Financial inclusion, shocks and coping strategies: survey evidence from Uganda

2019 ◽  
Vol 10 (3) ◽  
pp. 286-298 ◽  
Author(s):  
Joseph Mawejje
Keyword(s):  
Coping Strategies ◽  
Design Methodology ◽  
Financial Inclusion ◽  
Informal Networks ◽  
Informal Finance ◽  
Content Type ◽  
Lower Likelihood ◽  
And Coping ◽  
Market Strategies ◽  
Community Variables

Purpose The purpose of this paper is to investigate the roles that access formal and informal finance as well as mobile money play in facilitating the choice of coping strategies that households adopt. Design/methodology/approach The research methodology considers the estimation of binary outcome maximum likelihood probit models for each coping strategy on a vector of covariates that include measures of financial inclusion, household characteristics and community variables. Findings The author finds that financial inclusion is associated with a higher likelihood of adopting market-oriented strategies such as selling assets or borrowing and lower likelihood for non-market strategies such as reliance on informal networks and reducing consumption. Originality/value To the best of the author’s knowledge, this paper provides the first empirical attempt examining the pathways through which financial inclusion may facilitate the choice of coping strategies using nuanced household data.

Instruments for investment protection when structuring Islamic venture capital

2020 ◽  
Vol 11 (9) ◽  
pp. 1907-1920
Author(s):  
Abdul-Jalil Ibrahim ◽  
Monzer Kahf
Keyword(s):  
Venture Capital ◽  
Design Methodology ◽  
Secondary Data ◽  
Financial Inclusion ◽  
Islamic Finance ◽  
Content Type ◽  
Investment Protection ◽  
Potential Value ◽  
New Ideas ◽  
Practical Implications

Purpose This paper aims to explore how Sharīʿah-compliant instruments can be used to protect investments and attract investors to Islamic venture capital (IVC). Equity investments in Islamic finance are trailing behind their potential value. This is partly due to the limited instruments available to protect investors, as most of the tools used in conventional venture capital (VC) are deemed Sharīʿah non-compliant. Design/methodology/approach The research amends and uses Wright Robbie’s (1998) VC structure and how it can be used to finance small and medium-sized enterprises (SMEs). The study uses secondary data reported in the literature and the expertise of the Sharīʿah scholarship. Findings There are Sharīʿah-compliant instruments available for IVC that can be used to protect investments and incentivize potential investors to promote investments in SMEs. At the various stages of the IVC process, preference shares, perpetual mudharabah, diminishing musharakah, musharakah with murabahah, musharakah with qard, negligence clauses, liquidation preference, warrants and supermajority clauses can all be used with appropriate conditions to protect investors and offer incentives for them to invest in IVC. Practical implications The research provides a method for screening and evaluating potential deals for SMEs using an amended VC called an IVC scheme with a focus on Sharīʿah-compliant investment protection instruments. The method can promote SMEs and entrepreneurship and financial inclusion for Sharīʿah-compliant investors. Originality/value This study contributes new ideas to how IVC can be structured, taking into consideration Sharīʿah constraints. The paper addresses investors’ protection and incentives to attract Sharīʿah-compliant investors, which have been lacking in the literature.

Financial inclusion and FinTech

2019 ◽  
Vol 12 (1) ◽  
pp. 24-42 ◽  
Author(s):  
Hasnan Baber
Keyword(s):  
World Bank ◽  
Design Methodology ◽  
Financial Inclusion ◽  
Islamic Finance ◽  
Financial Systems ◽  
Content Type ◽  
Future Studies ◽  
Finance System ◽  
The Difference ◽  
Using Data

Purpose Using data from World Bank and Global Islamic Finance Report, this paper aims to compare the performance of countries following Islamic and conventional finance system in terms of financial inclusion and FinTech. Design/methodology/approach Ten countries from both financial systems have been selected based on the presence of Islamic finance and conventional finance in the country. Data was analyzed from year 2011 to 2017 and keeping the former as base year to measure the change in the population fraction. Findings The findings found that Islamic finance countries are more inclusive in terms of financial inclusion and women are financially more empowered as compared to the counterpart. On the contrary, countries with conventional finance have a higher number of FinTech users. Research limitations/implications The difference between the performances of two systems in terms of financial inclusion is relatively small; therefore, future studies should incorporate more indicators for financial inclusion. Originality/value This study will be useful for understanding the nature of both financial systems, and the further research can be done to find the determinants of financial inclusion.

scholarly journals Financial inclusion and small enterprise growth in Africa: emerging perspectives and research agenda

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
John Kuada
Keyword(s):  
Design Methodology ◽  
Relevant Literature ◽  
Financial Inclusion ◽  
Small Enterprise ◽  
Future Research ◽  
Narrative Approach ◽  
Research Attention ◽  
Content Type ◽  
Future Studies ◽  
Enterprise Growth

PurposeThe purposes of the paper are to review the stream of studies that link financial inclusion to small enterprise growth in Sub-Sahara Africa (SSA) to identify the research gaps they provide and to prepare an agenda for future research in the field.Design/methodology/approachThe study employs systematic literature search method to identify relevant literature from journals. The study then adopts a narrative approach for the review, highlighting the findings from the prior studies and gaps requiring research attention.FindingsThe discussions reveal that there is a need for future studies that can unpack small enterprise growth determinants, identify growth-enabling entrepreneurial characteristics and examine the contextual variabilities that shape their effectiveness.Originality/valueThere is currently no comprehensive/integrated review exploring the link between financial inclusion and small enterprise growth in SSA. The review, therefore, provides insights that contribute to the development of this stream of research.

Challenges and changes in Indian rural credit market: a review

2019 ◽  
Vol 79 (3) ◽  
pp. 338-352 ◽  
Author(s):  
Sougata Ray
Keyword(s):  
Structural Changes ◽  
State Level ◽  
Credit Market ◽  
National Sample ◽  
Sample Survey ◽  
Valuable Insight ◽  
Content Type ◽  
Rural Credit ◽  
The Government ◽  
Rural Credit Market

Purpose Post-independence, the rural credit market in India has undergone significant structural changes in order to enhance the availability and efficient use of credit. The purpose of this paper is to understand the challenges and changes in the Indian rural credit market in the post-independence period. Design/methodology/approach Using data from the All India Debt and Investment Survey conducted by the National Sample Survey Organisation of the Government of India from 1971–1972 to 2012 and Reserve Bank of India in 1951–1952 and 1961–1962, the study focuses on three important aspect of rural credit market, i.e. the availability, sources and uses of credit. The analysis is based on both the national and state level data and uses the decadal growth rates to explain the changes in the rural credit market. Findings Availability of credit, in terms of volume and number of households indebted, has increased substantially. However, the sharp rise in outstanding debt is a matter of concern. The share of credit from institutional agencies has seen a continuous decline post liberalisation. The non-institutional agencies, particularly the professional moneylenders, continue to be the most preferred sources of credit owing to their flexible nature of operation. Interesting, microfinance has emerged as a major source of credit particularly for the poor rural households. The rise in credit usage for non-income generating activities amongst poor households is another important concern. Originality/value The study highlights some of the most important features and characteristics associated with the Indian rural credit market. An understanding of these issues would provide valuable insight for shaping the future policy responses.

Information asymmetries and agricultural credit

2019 ◽  
Vol 79 (2) ◽  
pp. 217-233 ◽  
Author(s):  
Luis Felipe Zegarra
Keyword(s):  
Legal System ◽  
Credit Market ◽  
Primary Sources ◽  
Information Asymmetries ◽  
Agricultural Credit ◽  
Content Type ◽  
Access To Credit ◽  
Rural Credit ◽  
Collateral Evidence ◽  
Rural Credit Market

Purpose The purpose of this paper is to analyze the functioning of the rural credit market of Lima from 1825 to 1865, paying special attention to the effect of information asymmetries on the access to rural credit. Design/methodology/approach The article relies on primary sources for the study of the early credit market of Lima. In particular, the study relies on a sample of notarized loans for 1825–1865 and on property tax reports, collected from the National Archives of Peru, to determine the effect of information asymmetries, collateral and regional lending on access to credit. The article also analyzes the legal system of Peru during this period to determine whether property rights were well protected and so collateral could be used in the rural credit market. Findings A revision of the legislation shows that the legal system had some deficiencies, but allowed landlords and tenants to use their assets as collateral. Tax reports show that landlords and tenants owned valuable capital that could be used as collateral. Evidence from notarized loans shows that information asymmetries severely restricted inter-regional lending. In Lima, however, notaries played a role as financial intermediaries, providing the information about potential borrowers and allowing landlords and tenants to access credit. As a result, access to credit was significant for landlords and tenants. Originality/value This paper is one of the few historical studies on the role of information asymmetries in the allocation of rural credit in Latin America. It contributes to our understanding of credit markets prior to the creation of banks.

scholarly journals Islamic finance: financial inclusion or migration?

2018 ◽  
Vol 10 (2) ◽  
pp. 277-288 ◽  
Author(s):  
Ahmed Tahiri Jouti
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Design Methodology ◽  
Financial Inclusion ◽  
Islamic Finance ◽  
Islamic Banks ◽  
Content Type ◽  
The Stability ◽  
The Impact ◽  
Practical Implications

Purpose This paper aims to define a methodology to assess the impact of introducing Islamic finance on financial inclusion. Design/methodology/approach The paper is based on a literature review to understand the link between Islamic finance and financial inclusion. The second part of the paper presents a conceptual framework to assess the impact of introducing Islamic finance on financial inclusion in a defined context based on the profiling of people interested in Islamic finance. Findings The paper brings an insight on the impact of introducing Islamic finance. Indeed, it could cause a financial migration to Islamic banks that can take many forms and depends on many factors that call for deep analysis. Research limitations/implications The paper would help financial authorities and financial institutions to measure the impact of introducing Islamic finance on their businesses and the stability of the whole system. Practical implications Islamic finance can not only enhance financial inclusion but also create financial migration. The two implications can vary from one context to another. Social implications Islamic finance can contribute in the effort of including “self-excluded” people with religious concerns as well as people without access to financial services. Originality/value This paper promotes the idea that Islamic finance is not exclusively a way to enhance financial inclusion.

scholarly journals Measuring financial inclusion: a composite FI index for the developing countries

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Thi Truc Huong Nguyen
Keyword(s):  
Developing Countries ◽  
Design Methodology ◽  
Principal Component ◽  
Financial Inclusion ◽  
Analysis Method ◽  
Content Type ◽  
Secondary Sources ◽  
Sustainable Economic Growth ◽  
Practical Implications

PurposeThe purpose of this paper is to focus on measuring financial inclusion (FI) level for the developing countries.Design/methodology/approachBy using a two-stage principal component analysis method, we construct a composite FI index to measure the degree of FI. Data are collected through secondary sources including World Bank and IMF reports for the period 2012–2018.FindingsWe have built an overall FI index which is considered as a comprehensive measure of FI, a useful tool for policymaking and policy evaluation. Comparison with other studies shows that our FI index corroborates with them.Practical implicationsBuilding a good FI measurement method is important for developing countries. It helps to assess and compare the level of FI of each country and between countries together, made easily and accurately.Originality/valueThis study emphasizes the important role of FI in the economy. From there, an FI solution is integrated into the construction and calculation of its impact on other factors. This will help policymakers to take effective measures to increase FI levels to achieve sustainable economic growth.

Public pension and borrowing behavior: evidence from rural China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Conglong Fang ◽  
Qinghua Shi
Keyword(s):  
Design Methodology ◽  
Rural China ◽  
Eastern China ◽  
The Elderly ◽  
Public Pension ◽  
Pension Scheme ◽  
Content Type ◽  
Rural Credit ◽  
Rural Credit Cooperatives ◽  
Credit Cooperatives

PurposeThe purpose of this paper is to investigate how China's rural public pension affects farmers' formal borrowing, which has always been rationed.Design/methodology/approachThis paper uses a difference-in-difference (DID) estimation to evaluate the effect of the implementation of the New Rural Pension Scheme (NRPS) at the end of 2009 on farmers' formal borrowing.FindingsThe results show that the NRPS significantly reduces farmers' formal borrowing from rural credit cooperatives (RCCs). The effect is significant among the elderly, eastern China and high-income groups.Originality/valueThis study contributes to the literature by identifying another potential reason for rural formal credit shortage. Policymakers and rural formal financial institutions should consider the demand side problem of lending.

Financial inclusion and agricultural commercialization in Ghana: an empirical investigation

2017 ◽  
Vol 77 (4) ◽  
pp. 524-544 ◽  
Author(s):  
Benjamin Musah Abu ◽  
Issahaku Haruna
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Empirical Investigation ◽  
Smallholder Farmers ◽  
Financial Inclusion ◽  
Farm Households ◽  
Future Research ◽  
Content Type ◽  
Econometric Methodology ◽  
Practical Implications

Purpose The purpose of this paper is to investigate the connections between financial inclusion and agricultural commercialization among farmers in Ghana. Design/methodology/approach In order to address endogeneity and sample selectivity bias, the study employs endogenous switching regressions (ESRs) to examine whether financially included and financially excluded maize farm households differ in their commercialization behavior and whether financial inclusion affects commercialization. The Heckman Treatment Effect (HTE) model is used to test for robustness of the results. The data used contain a random sample of 2,230 maize farmers across the ten regions of Ghana. Findings The results from the ESRs show that financial inclusion significantly fosters agricultural commercialization. Specifically, financially included households sell 13.25 percent more output than their financially excluded counterparts. In terms of the counterfactual, financially excluded households would have sold 5.04 percent more output if they were to have access to financial services. Results from the HTE model confirm that financial inclusion promotes agricultural commercialization. Practical implications Financial inclusion is low among maize farmers; this implies that there are more benefits to be gained by ensuring that farmers have access to a broad range of financial services. Social implications The findings imply that the quest for the integration of smallholder farmers into markets cannot overlook measures to ensure financial inclusion. Originality/value It represents the first attempt at linking financial inclusion to agricultural commercialization using econometric methodology. The study serves as a foundation paper and for that matter will serve as a guide to future research on the financial inclusion-agricultural commercialization nexus.

Sign in / Sign up

Export Citation Format

Share Document