Financial inclusion, mobile banking, informal finance and financial exclusion: micro-level evidence from Morocco

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Elhadj Ezzahid ◽  
Zakaria Elouaourti
Keyword(s):  
Two Dimensions ◽  
Financial Inclusion ◽  
Financial Behavior ◽  
Mobile Banking ◽  
Informal Finance ◽  
Content Type ◽  
High Educational Attainment ◽  
Financial Exclusion ◽  
Micro Level ◽  
High Educational

PurposeThis study has a dual purpose. The first is constructing a financial inclusion index to investigate if the reforms implemented during the last decades at the macroeconomic and sectoral levels have contributed to increase the financial inclusion level in Morocco. The second is to deepen the investigation to explore the impact of these reforms at the microeconomic level, by focusing on six major issues: determinants of financial inclusion, links between individual characteristics and barriers to financial inclusion, determinants of mobile banking use, motivations for saving, credit objectives and determinants of resorting to informal finance.Design/methodology/approachFirst, the principal component analysis methodology is mobilized to construct a financial inclusion index for Morocco. Second, the probit model methodology on a micro-level database of 5,110 Moroccan adults is used.FindingsFirst, the financial inclusion index shows that financial inclusion in Morocco over the last two decades has followed different trends. The first period (1999–2004) was characterized by a slight upswing in the level of financial inclusion. In the second period (2004–2012), the level of financial inclusion increased significantly. During the third period (2012–2019), the financial inclusion maintained almost the same level. Second, empirical results showed that the determinants of formal finance and mobile banking are different from those of informal finance. Having a high educational attainment and being a participant in the labor market fosters financial inclusion. Concerning financial exclusion determinants, the results emphasized that a high educational attainment reduces the barriers leading to voluntary exclusion. As income level increases, barriers of involuntary exclusion such as “lack of money” become surmountable. Although "remoteness" and "high cost" are the major barriers to financial inclusion of all Moroccan social classes, the development of mobile banking allows to eliminate, smoothen and/or loosen all barriers sources of involuntary exclusion. As for the barriers causing voluntary exclusion, the Islamic finance model constitutes a lever for the inclusion of population segments excluded for religious reasons. As for the determinants of the recourse to informal finance, being a woman, an older person and having a low educational level (no more than secondary education) increase the probability to turn to informal finance.Research limitations/implicationsThe main limitation of this study is the non-availability of data on the two dimensions (quality and welfare) of financial inclusion. The composite index is constructed on the basis of two dimensions (access and use) for which data are available.Practical implicationsThis study has three main implications. In practice, with the launching of the National Strategy for Financial Inclusion, this work provides empirical grounded evidence that contributes to design financial inclusion policies in Morocco. In research, while the debate on financial inclusion, mobile banking and informal finance has been raging in recent years, Morocco, like many other African countries, has not received coverage on these topics at the household level.Social implicationsFor society, this study provides considerable insight about the segments of population that are financially excluded and the main reasons for their exclusion.Originality/valueThis study enriches the existing literature with four essential contributions. First, it analyzes the evolution of the level of financial inclusion in the Moroccan economy through the development of a synthetic index. Second, it is the first to study the Moroccan population's financial behavior on the basis of micro-level data, which will help understand more precisely their financial behavior and the main obstacles to their inclusion. Third, this study explores the determinants of the use of mobile banking. Fourth, it sheds some light on the main determinants of the recourse to informal finance.

Integration of Waqf towards enhancing financial inclusion and socio-economic justice in Nigeria

2020 ◽  
Vol 36 (4) ◽  
pp. 491-505
Author(s):  
Nurudeen Abubakar Zauro ◽  
Ram Al Jaffri Saad ◽  
Aidi Ahmi ◽  
Mohd Yahya Mohd Hussin
Keyword(s):  
World View ◽  
Empirical Studies ◽  
Economic Justice ◽  
Financial Inclusion ◽  
High Rate ◽  
Content Type ◽  
Secondary Sources ◽  
Financial Exclusion ◽  
Conceptual Study ◽  
High Level

Purpose This paper aims to discuss the role of Waqf as a means of enhancing financial inclusion and socio-economic justice in Nigeria. Design/methodology/approach The methodology in this paper is that the data were elicited from secondary sources such as the Al-Qur’an, Hadiths and other empirical studies in the existing literature. The Tawhidi epistemology (Islamic world view) also has been obtained to deliver better understanding on the findings. Findings The paper implores Islamic societies to take advantages of integrating Waqf to support the financing needs of disadvantaged members of the Muslims communities, especially the Muslims, dominated northern Nigeria with a high level of financial exclusion. The Waqf funds if integrated and institutionalized will support the region by making the fewer privilege members of that community-engaged thereby economically and enhancing the financial inclusion. This will also lead to economic growth and socio-economic development of Nigeria. Practical implications The paper concludes by suggesting the establishment of Waqf funds to supports the less privileged people through Islamic Microfinance as means of enhancing socio-economic justice in Nigeria’s Muslims’ communities, which is negatively affected by the high rate of financial exclusion and poverty. This paper also provides critical suggestions on the ways the integration of Waqf funds will contribute significantly towards assisting Nigeria in achieving its vision of reducing the financial exclusion rate and may foster inclusive growth and sustainable development. Originality/value This paper is a conceptual study and, therefore, limited to the content of the existing literature. Hence, the future researchers may replicate and test it empirically for a more scientific justification regarding the roles of Waqf towards enhancing financial inclusion in Nigeria.

Financial self-efficacy: a determinant of financial inclusion

2017 ◽  
Vol 35 (3) ◽  
pp. 338-353 ◽  
Author(s):  
Rachel Mindra ◽  
Musa Moya ◽  
Linda Tia Zuze ◽  
Odongo Kodongo
Keyword(s):  
Financial Services ◽  
Self Efficacy ◽  
Structural Equation ◽  
Structural Equation Models ◽  
Service Providers ◽  
Financial Service ◽  
Financial Inclusion ◽  
Financial Behavior ◽  
Cross Sectional ◽  
Content Type

Purpose The purpose of this paper is to examine the relationship between financial self-efficacy (FSE) and financial inclusion (FI) among individual financial consumers in Uganda. Design/methodology/approach Using a quantitative approach and cross-sectional research design, a sample of 400 individuals from urban Central and rural Northern Uganda was drawn. SPSS and AMOS™ 21, regression analysis and structural equation models were used to establish the hypothesized relationship between FSE and FI. Findings The results suggest a strong positive and significant relationship between FSE and FI. The results further suggest that other variables which were controlled for, such as age and gender, had significant influence on an individual’s usage of formal financial services. Research limitations/implications The study was assessed using both potential and actual consumers of financial services collectively. However, if separately assessed, possibly there would be a variation in behavioral responses toward FI. Practical implications Formal financial service providers need to enhance individuals’ levels of confidence in management of finances and utilization of formal financial products and services, so that the financial consumers can realize the changes in financial behavior and consequently FI. Social implications The enhancement of individuals’ level of confidence in evaluating the available financial service options will guide them to take financial decisions that will improve their livelihood. Originality/value The results contribute toward the limited empirical and theoretical evidence for FSE and FI from a behavioral demand-side perspective.

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.

The effect of financial literacy and gender on retirement planning among young adults

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Osvaldo García Mata
Keyword(s):  
Young Adults ◽  
Financial Literacy ◽  
Structural Equation ◽  
Structural Equation Models ◽  
Retirement Planning ◽  
Financial Inclusion ◽  
Financial Behavior ◽  
Moderator Variable ◽  
Content Type ◽  
And Gender

PurposeThe purpose of this paper is to analyze financial literacy's effect on retirement planning among young adults in Mexico, with gender as a moderator variable. Planning refers to the actual or intended implementation of several retirement strategies: private pension funds, investing in assets, government subsidies and family assistance.Design/methodology/approachThe article's methodology is quantitative, empirical and cross-sectional. Ajzen's theory of planned behavior (1991) works as the theoretical framework to examine planning for retirement intentions determined by individuals' financial inclusion, attitudes, knowledge, behavior, occupation and family traits. The methodology follows generalized structural equation models (GSEM) with logistic regression basis, constructed with data from the National Survey on Financial Inclusion 2018.FindingsResults confirm that the most financially knowledgeable individuals have lesser intentions to pursue passive strategies, while financial behavior and inclusion associate with actively planning. Gender plays a fundamental role in retirement planning too.Research limitations/implicationsObservations for several years are necessary to effectuate longitudinal analysis. Further research should include a more in-depth study of strategy choice triggers and policy impact on retirement planning.Social implicationsFindings can be useful to public and private institutions focused on saving, investment and retirement, especially in economies comparable to Mexico's. Avoiding the higher social costs associated with poor retirement planning depends on timely decision-making.Originality/valueThis study goes beyond the traditional pension fund strategy to analyze other options. It delivers information about young people's long-term financial plans in Mexico concerning financial literacy and gender.

Colombia financial inclusion set to progress

2017 ◽  
Keyword(s):  
Latin American ◽  
Financial Services ◽  
Social Inclusion ◽  
Poverty Reduction ◽  
Financial System ◽  
Financial Inclusion ◽  
Foreign Banks ◽  
Content Type ◽  
Access To Credit ◽  
Financial Exclusion

Subject Financial inclusion in Colombia. Significance Colombia saw nearly 1 million adults join the financial system for the first time in 2016, despite the economy struggling with sluggish growth. Financial inclusion is a high priority for several Latin American governments at the moment, with high degrees of financial exclusion viewed as obstacles to economic growth, social inclusion and poverty reduction. Impacts Greater financial inclusion will help reduce informality in the Colombian economy, and the high use of cash. Improved access to credit and a range of financial services will support the growth of the country’s many SMEs. Millions of new financial system customers will make Colombia even more attractive to foreign banks.

scholarly journals Financial inclusion and business cycles

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Peterson K. Ozili
Keyword(s):  
Business Cycles ◽  
Business Cycle ◽  
Adult Population ◽  
Financial Inclusion ◽  
Current Debate ◽  
Poor People ◽  
Content Type ◽  
Financial Exclusion ◽  
The Business Cycle ◽  
Recessionary Periods

Purpose This study aims to investigate the relationship between financial inclusion and the business cycle. Design/methodology/approach Regression methodology is used to analyze the association between financial inclusion and the business cycle. Findings Using regression estimation, the findings reveal that the level of savings and the number of active formal account ownership are pro-cyclical with fluctuations in the business cycle. Also, savings by adults particularly for women and poor people declines during recessionary periods while the number of active formal account ownership declines for the adult population especially for women during recessionary periods. The findings also reveal that not all indicators of financial inclusion are pro-cyclical with fluctuating business cycles. Practical implications The implication of this observed pro-cyclical effect is that individuals and households will exit the formal financial sector during a recession, as banks become unwilling to lend money to individuals and households during bad times and this will lead to financial exclusion and vice versa. Policymakers seeking to increase the level of financial inclusion in their countries should focus on the timing of financial inclusion policies along the business cycle as the findings suggest that it might be more difficult to achieve financial inclusion objectives during recessions or periods of economic downturns. Originality/value The current debate on financial inclusion pays little attention to whether financial inclusion is pro-cyclical with the fluctuating business cycle. This study explores the association between financial inclusion and the business cycle.

Enhancing socio-economic justice and financial inclusion in Nigeria

2020 ◽  
Vol 11 (3) ◽  
pp. 555-572
Author(s):  
Nurudeen Abubakar Zauro ◽  
Nurudeen Abubakar Zauro ◽  
Ram Al Jaffri Saad ◽  
Norfaiezah Sawandi
Keyword(s):  
World View ◽  
Empirical Studies ◽  
Moral Economy ◽  
Economic Justice ◽  
Financial Inclusion ◽  
High Rate ◽  
Financial Instruments ◽  
Content Type ◽  
Financial Exclusion ◽  
Wealth Redistribution

Purpose The purpose of this paper is to discuss the roles of Zakat, Sadaqah and Qardhul Hassan within the context of the existing literature as major Islamic financial instruments for enhancing socio-economic justice amongst Muslims haves and have-nots as these enhance financial inclusion in Nigeria. Design/methodology/approach The discussion in this paper is based on secondary sources such as the divine knowledge contained in the Qur’an, Hadiths and the existing literature, such as previously conducted empirical studies and Islamic world view (Tawhidi epistemology). Findings This paper implores Islamic societies to use Zakat, Sadaqah and Qardhul Hassan as instruments that encourages wealth redistribution that promotes efficient and effective wealth redistribution between haves and have-nots as part of the vicegerent (khaliphah) role between mortal being (human) and his immortal creator (Allah). This paper concludes by suggesting the use of these Islamic financial instruments as means to enhance socio-economic justice and financial inclusion in the Nigeria’s Muslims’ communities that are negatively affected by the high rate of financial exclusion and poverty as had been previously practiced in the Muslim world throughout the Islamic history. Research limitations/implications This paper provides critical suggestions on the ways Zakat, Sadaqah and Qardhul Hassan will contribute significantly towards assisting Nigeria in achieving its vision of reducing the financial exclusion rate that is currently put at 41.6% to 20% by the year 2020 and may foster inclusive growth and sustainable development. However, the limitation is that it is a mare conceptual study, and the future researchers may subject it to the scientific test to offer empirical evidence regarding the roles of Zakat, Sadaqah and Qardhul Hassan towards closing the gap of financial exclusion in Nigeria. Originality/value This paper contributes to the existing literature on the doctrine of the Islamic moral economy by recommending the adoption of Islamic financial instruments as tools for enhancing income redistribution and financial inclusion.

Is religion (interest) an impediment to Nigeria’s financial inclusion targets by the year 2020?

2019 ◽  
Vol 12 (3) ◽  
pp. 283-300
Author(s):  
Umar Habibu Umar ◽  
Muhammad Bilyaminu Ado ◽  
Habibu Ayuba
Keyword(s):  
Financial Inclusion ◽  
State Governments ◽  
Documentary Evidence ◽  
Structured Interviews ◽  
Agricultural Credit ◽  
Content Type ◽  
Private Organizations ◽  
Financial Exclusion ◽  
Muslim Majority ◽  
Finance Department

Purpose The purpose of this study is to establish whether religion (interest) is an impediment to Nigeria’s financial inclusion targets to be achieved by the year 2020. Design/methodology/approach The data were collected through semi-structured interviews and documentary evidence. Thematic analysis was used to analyze the interview responses. Findings It was found that all the Central Bank of Nigeria (CBN) programs that contribute toward achieving financial inclusion are interest-based ones. Further, none of them provides a non-interest window except Commercial Agricultural Credit Schemes (CACS). Even the CACS is not fully Shari’a-compliant, as it requires further modification. Despite the fact that interest is condemned in Islam, a majority of Muslims have been found to be accessing interest-based funds. Hence, interest is not a factor that hinders the achievement of reducing Nigeria’s financial exclusion rate to 20 per cent by the year 2020. Research limitations/implications This study inquired into the programs under the Development Finance Department of the CBN by using semi-structured interviews and documentary evidence. Other programs of the federal government, state governments, NGOs and other private organizations and individuals are not considered. The findings have pointed out the areas to conduct future studies on religion and financial inclusion. Practical implications Although Muslims who complained about interest are a minority, there is the need to provide non-interest windows in the programs before they start shunning these programs, as a lot influential Muslim scholars are currently preaching against the interest. Originality/value The paper is one of the few studies that support the view that interest does not hinder the achievement of financial inclusion in a Muslim majority country.

scholarly journals Digital Banking and Financial Inclusion of Women Enterprises in Narok County, Kenya

2020 ◽  
Vol 2 (1) ◽  
pp. 28-41
Author(s):  
Kisotu David Melubo ◽  
Salome Musau
Keyword(s):  
Financial Services ◽  
Banking Sector ◽  
Target Population ◽  
Online Banking ◽  
Financial Inclusion ◽  
Primary Data ◽  
Mobile Banking ◽  
Banking Services ◽  
Financial Exclusion ◽  
The Many

Financial inclusion is an important step in development, as access to finances can help the women to build money and lift themselves out of poverty. Lack of financial inclusion among women in Narok County is one of the many factors leading to financial exclusion and an introduction of digital banking is the remedy to its problems. Financial inclusion of women contributes immensely in empowering them. Digital banking in Kenya has been characterized by rapid technological change in the finance sector that has led to the development of mobile banking, online banking, ATMs and agency banking. The banking sector has undergone substantive transformation particularly from the year 2007. This study sought to establish the effects of digital banking and financial inclusion of Women Enterprises in Narok County, Kenya. Financial inclusion includes the provision of affordable financial services, which includes; access to payments and remittance facilities, savings, loans and insurance services by the formal financial system to those who tend to be excluded The study was anchored on finance growth theory and financial asymmetric theory. This study used descriptive research design and data was collected from the target population of all the 184 women owned enterprise in Narok County, Kenya. For this study census sampling was adopted to where all the population will be included in study since the number of target population is 184. Primary data was collected using a semi structured questionnaire to be administered to the women business owner through face to face interviews. The collected data was analysed using descriptive statistics methods; mean, mode, median, standard deviation, percentages and frequencies. Inferential statistical methods included multiple regression analysis was used to establish the relationship among variables. It was established that digital banking services significantly and positively influenced financial inclusion of women enterprises in Narok County. The study concluded that agency banking, mobile banking, online banking and ATM services significantly influenced the access and use of banking services by the locally based women enterprises in Narok County. It was further concluded that the women enterprises did not adequately use online banking due to limited literacy level, computer proficiency and internet availability. The study recommends that the available financial sector players in Narok County needs to sensitize SMEs especially women-owned to ensure that they are aware of the digital services available to be in the loop to enhance financial inclusion. The study recommends that the available digital banking providers need to improve formation of groups among the users of the services to enable improve usability. The study recommends further that the women enterprises managers and proprietors need to be in groups to develop each other and assist access, use and improve digital banking and financial inclusion.

Two dimensions of trust in physicians in OECD-countries

2016 ◽  
Vol 29 (1) ◽  
pp. 48-61 ◽  
Author(s):  
Arttu Olavi Saarinen ◽  
Pekka Räsänen ◽  
Antti Kouvo
Keyword(s):  
Oecd Countries ◽  
Two Dimensions ◽  
Macro Level ◽  
Physician Density ◽  
Content Type ◽  
Individual Level ◽  
General Trust ◽  
Systems Research ◽  
Micro Level ◽  
Trust In Physicians

Purpose – The purpose of this paper is to analyse citizens’ trust in physicians in 22 OECD countries. Design/methodology/approach – The authors measure trust in physicians using items on generalised and particularised trust. Individual-level data are received from the ISSP Research Group (2011). The authors also utilise macro variables drawn from different data banks. Data were analysed using descriptive statistics and xtlogit regression models. The main micro-level hypothesis is that low self-reported health is strongly associated with lower trust in physicians. The second micro-level hypothesis is that frequent meetings with physicians result in higher trust. The third micro-level hypothesis assumes that males, and older and better educated respondents, express higher trust compared to others. The first macro-level hypothesis is that lower income inequality leads to higher trust in physicians. The second macro-level hypothesis is that greater physician density leads to higher trust in physicians. Findings – The authors found that the influence of individual and macro-level characteristics varies between trust types. Results indicate that both trust types are clearly associated with individual-level determinants. However, only general trust in physicians has weak associations with macro-level indicators (mainly physician density) and therefore on institutional cross-country differences. It seems that particularised trust in a physician’s skills is more restricted to the individuals’ health and their own experiences meeting doctors, whereas general trust likely reflects attitudes towards the prevalent profession in the country. Originality/value – The findings hold significance for healthcare systems research and for research concerning social trust generally.

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