scholarly journals How does financial literacy impact on inclusive finance?

2021 ◽  
Vol 7 (1) ◽  
Author(s):  
Morshadul Hasan ◽  
Thi Le ◽  
Ariful Hoque
Keyword(s):  
Rural Areas ◽  
Financial Literacy ◽  
Financial Services ◽  
Rural Population ◽  
Poverty Reduction ◽  
Population Data ◽  
Financial Inclusion ◽  
Probit Regression ◽  
Financial Access

AbstractInclusive finance is a core concept of finance that makes various financial products and services accessible and affordable to all individuals and businesses, especially those excluded from the formal financial system. One of the leading forces affecting people's ability to access financial services in rural areas is financial literacy. This study investigated the impacts of financial knowledge on financial access through banking, microfinance, and fintech access using the Bangladesh rural population data. We employed three econometrics models: logistic regression, probit regression, and complementary log–log regression to examine whether financial literacy significantly affects removing the barriers that prevent people from participating and using financial services to improve their lives. The empirical findings showed that knowledge regarding various financial services factors had significant impacts on getting financial access. Some variables such as profession, income level, knowledge regarding depositing and withdrawing money, and knowledge regarding interest rate highly affected the overall access to finance. The study's results provide valuable recommendations for the policymaker to improve financial inclusion in the developing country context. A comprehensive and long-term education program should be delivered broadly to the rural population to make a big stride in financial inclusion, a key driver of poverty reduction and prosperity boosting.

Financial Inclusion in India-A Review

2020 ◽  
pp. 278-284
Keyword(s):  
Rural Areas ◽  
Financial Literacy ◽  
Financial Services ◽  
Poverty Reduction ◽  
Financial Inclusion ◽  
World Bank Group ◽  
Critical Issues ◽  
The Status ◽  
The Government ◽  
Bank Group

Financial inclusion has been widely recognized as an engine of economic and social development. World Bank group laid stress on the role of financial inclusion in poverty reduction and boosting shared prosperity. Increasing the importance of financial inclusion for inclusive growth has gained the attention of researchers and academicians across the world. This review deals with the findings of research studies conducted on the extent and status of financial inclusion in India. A review of empirical findings revealed that despite many initiatives taken jointly by the Government and Reserve Bank of India, financial services outreach was not been very satisfactory. People particularly in rural areas, still did not have access to banking services. Evidence of gaps in financial inclusiveness in the country could also be perceived from the review. Lack of awareness and financial literacy, high cost of financial services, continued dependence of rural people on moneylenders, regional disparities in terms of outreach, etc. emerged as some of the critical issues. Hence, the study suggested that some concrete steps need to be taken by the government to improve the status of financial inclusion

scholarly journals Agent Banking And Poverty Reduction In Benue State, Nigeria

2020 ◽  
Vol 7 (5) ◽  
pp. 213-229
Author(s):  
David Terfa Akighir ◽  
T. Jacob Tyagher ◽  
Aaron Ateata
Keyword(s):  
Local Government ◽  
Rural Areas ◽  
Financial Literacy ◽  
Rural Population ◽  
Poverty Reduction ◽  
The State ◽  
Financial Inclusion ◽  
Economic Activities ◽  
Logit Regression Model ◽  
The Impact

The study investigated the impact of agent banking on poverty reduction in Benue State, Nigeria. The study is hinged on the agency theory, risk management theory, the regulatory dialectic theory and the basic needs theory. Focusing on the agent banking activities of the First bank PLC, the study used the Taro Yammene’s formula to select 199 agents for investigation. Questionnaire was used for data collection but only 185 copies of the questionnaire were retrieved for analysis. The study employed descriptive tools such as tables and percentages and paired t-test as well as Foster, Greer and Thornbecke (FGT) index. Also, a logit regression model was employed to ascertain whether or not agent bank has the probability of reducing poverty in Benue State. The study found that engaging in agent banking has the probability of reducing poverty in Benue State which is typically an agrarian state with high poverty incidence among highly unbanked population. Agent banking in this unbanked State where only 11 local government areas out of 23 local government areas have the presence of banks has the potential of increasing financial inclusion and enhancing financial literacy. With the presence of agent banking in the state, it will enhance business sustainability and facilitate financial transactions. These will increase economic activities and increase employments and reduce poverty. Given the potentials of agent banking for socio-economic development in the state, it is recommended that financial literacy awareness should be created so that rural population who have long lived unbanked to accept banking services via the agent banking. Also, banks operating in the state should leverage on the opportunity of agent banking to penetrate the rural population with a view to achieving financial inclusion in line with the CBN’s revived National Financial Inclusion Strategy (NFIS) which places implementation focus on women, rural areas, youth, Northern Nigeria and MSMEs to achieve 95% financial inclusion rate by 2024.

scholarly journals Financial Inclusion of the Region: Analysis of the State and Ways of Ensuring

2019 ◽  
pp. 61-74
Author(s):  
Andrii Matkovskyi ◽  
Vitaliia Skryl ◽  
Ruslana Shtanko
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Rural Population ◽  
The State ◽  
Current Level ◽  
Financial Inclusion ◽  
The Media ◽  
State And Local ◽  
Urgent Action

Financial inclusion of the region is a means of making full use of the financial services industry's tools, which ultimately contributes to the long-term economic growth of the region, as it stimulates innovation, mobilizes savings and supports investment. The paper analyzes the current level of financial inclusion of the Poltava region. The study showed that the current level of financial inclusion of the Poltava region is low. Surveys of the respondents showed that there is a large disproportionate level of financial inclusion among urban and rural population. The rural population is limited in financial services. There is still a significant lack of confidence in financial institutions. All this slows down the processes of full involvement of the population in financial inclusion and creates a shadow sector. However, remediation is observed in urgent action by both the state and local authorities and financial institutions. Continuous information in the media and social networks in the future will be able to restore confidence in financial institutions and thus increase not only the level of financial inclusion, but also every inhabitant of the Poltava region.

scholarly journals Proposed Theoretical Measurement Model for Financial Inclusion with Perspective of Refuge Inhabitants

2018 ◽  
Vol 7 (1) ◽  
pp. 21-25
Author(s):  
S. Sheik Abdullah ◽  
A. Krishna Kumar
Keyword(s):  
Low Income ◽  
Rural Areas ◽  
Financial Literacy ◽  
Financial Services ◽  
Measurement Model ◽  
Financial Inclusion ◽  
Vulnerable Groups ◽  
Poor People ◽  
Supply Side ◽  
Complex Processes

Financial inclusion takes into account the participation of vulnerable groups such as weaker sections of the society and low income groups, based on the extent of their access to financial services such as savings and payment account, credit insurance, pensions etc. Also the objective of financial inclusion exercise is easy availability of financial services which allows maximum investment in business opportunities, education, save for retirement, insurance against risks by the rural individuals and firms. The penetration of financial services in the rural areas of India is still very low. The factors responsible for this condition can be looked at from both supply side and demand side and the major reason for low penetration of financial services is, probably, lack of supply. The reasons for low demand for financial services could be low income level, lack of financial literacy, other bank accounts in the family, etc. On the other hand, the supply side factors include no bank branch in the vicinity, lack of suitable products meeting the needs of the poor people, complex processes and language barriers. There is no studies conducted earlier especially financial inclusion initiatives with refugee inhabitants. Therefore this study was undertaken to propose the model of refugee inhabitants towards financial inclusion initiatives by the banks. The exhibited model consisting four essential factors, which are very useful for measuring financial inclusion practices.

scholarly journals Modern aspects of the development of financial inclusion in rural areas of the Russian Federation

2021 ◽  
Vol 285 ◽  
pp. 01013
Author(s):  
Svetlana Podgorskaya
Keyword(s):  
Mobile Communications ◽  
Rural Areas ◽  
Financial Services ◽  
Digital Literacy ◽  
Rural Population ◽  
Information Technologies ◽  
Financial Inclusion ◽  
Digital Inequality ◽  
Low Level ◽  
Special Programs

The article considers financial inclusion as the most important means of achieving sustainable comprehensive economic growth. It is established that in the new model of sustainable development of rural areas, the financial involvement of households and small and medium-sized businesses is of particular importance. However, in Russia, among all segments of the population, the most excluded category from financial and economic interaction is precisely rural residents. The main reasons for this situation are digital inequality in the form of low availability of digital communications (Internet and mobile communications) for the rural population, the low level of digital and financial competencies of the villagers, and the low level of income of rural households. Despite the government’s policy to increase the financial accessibility of banking services and eliminate digital inequality, in regulatory and policy documents, references to rural areas are either indirect or absent. Today, there is a boom in the digitalization of financial services; the level of development of information technologies allows you to create more convenient, efficient and mobile products that do not require visits to bank branches and face-to-face consultations. At the same time, such digitalization can become a threat to the development of financial inclusion in rural areas. In this regard, are needed special programs to improve the financial and digital literacy of the rural population, as well as a system of accessible consulting support on lending issues.

scholarly journals Financial Literacy - A Determinant of Investment in Health Insurance

2020 ◽  
Vol 8 (3) ◽  
pp. 33-38
Author(s):  
Rukmini Murugesan ◽  
V Manohar
Keyword(s):  
Financial Literacy ◽  
Financial Services ◽  
Global Economy ◽  
Consumer Welfare ◽  
Bank Loans ◽  
Financial Inclusion ◽  
Health And Wellness ◽  
Area Unit ◽  
Set Up

The financial set-up of a rustic plays a key role in economic development. Since independence Asian nation leaders area unit is going to eradicate impoverishment and switch India into a spirited, self –reliant global economy and embedded financial literacy needs in every citizen’s life. India is historically a rustic of avid savers. Indians are suffering from financial stress like under insurance, debt trap, insufficient retirement fund, and low return on investment due to weak financial literacy, which shows an impact on health and wellness. For financial inclusion and inclusive growth: Financial literacy and financial inclusion are twin pillars where fiscal inclusion act as the supply side of proving financial services and financial literacy act as demand facet creating public familiar that what they must obtain. The literature confirms that there is a strong link between financial literacy, the use of financial services, and consumer welfare. Life-insurance and pension funds, especially in developing societies, in contrast to that of short-term bank loans, long-term funding to provide important contributions to the country’s economy. These conditions are that the presence of a good insurance system to fulfill all of the expectations, and create a competitive insurance market, citizens-rights and protect the interests, increase the confidence in their system. The creation of welfare awareness and demand will solely be achieved with a healthy legal infrastructure. 

scholarly journals Issues and Challenges of Financial Inclusion Among Low-Income Earners In Rural Areas of Malaysia

2021 ◽  
Vol 8 (Special Issue) ◽  
pp. 277-299
Author(s):  
Salihah Sharizan ◽  
Nur Harena Redzuan ◽  
Romzie Rosman
Keyword(s):  
Financial Institutions ◽  
Low Income ◽  
Rural Areas ◽  
Financial Literacy ◽  
Financial Services ◽  
Financial Education ◽  
Financial Inclusion ◽  
Primary Data ◽  
Structured Interviews ◽  
Finance Industry

Financial inclusion (FI) appears to be one of the main global agendas as it is an essential way of reducing poverty and increasing the economic growth of a country. FI is the provision of financial services to all segments of society in a more convenient, quality, and affordable way. In this study, the authors analyzed the issues and challenges faced from the two perspectives of the Financial Institutions (FIs) and the rural B40 group concerning the way of pursuing the exclusive of FI. Primary data was collected by conducting semi-structured interviews with four expert bankers from the Financial Institutions (FIs) in Kuala Rompin, Pahang, and two representatives from the B40 customers in the rural areas of Pekan, Pahang, Malaysia. Based on the findings, barriers faced by the supply sides of the FIs include 1) high risk of cost and security, 2) barriers in communication and lack of financial education, and 3) lack of proof documents. The other challenges are 1) competition with the conventional institutions, 2) default risk due to non-payment, and 3) internet connection problem. On the demand side, the issues and challenges found include 1) lack of confidence, 2) lack of proof documents, 3) misuse of capital, and 4) lack of financial literacy. Henceforth, the findings have significant implications for the Islamic banking and finance industry in exploring the current barriers faced in delivering financial inclusion to the lower segment of the society in Malaysia.

Evaluation of Financial Inclusion Index for accessing Banking Technology through Rural Population from the States of India

2019 ◽  
Vol 118 (8) ◽  
pp. 261-265
Author(s):  
Dr.M. Bhuvana
Keyword(s):  
Rural Areas ◽  
Financial Services ◽  
Rural Population ◽  
Research Study ◽  
Financial Inclusion ◽  
Insurance Company ◽  
Indian Government ◽  
Financial Products ◽  
Reserve Bank ◽  
Reserve Bank Of India

Reserve bank of India has described the term Financial Inclusion as the sequence of activities that has taken place in proving financial services to the most vulnerable people in country at a very low affordable cost. The financial services like assess to financial products such as small deposits and savings, providing basic credit requirements through formal financial institutions like post offices, banks, microfinance institutions and banks. Rural people faces may issues and challenges in using financial products and services to meet their basic needs. Hence this research study has done an analysis to evaluate index of financial inclusion for various states of India with four different types of dimensions like Penetration of Bank Branches in rural areas, Credit Penetration, Deposit and Penetration of Insurance Companies in the rural regions of all the states of India. Different resources namely the website of Reserve Bank of India, Census 2011 data, articles and journals has been utilized to gather the secondary data for the study. The dimensions such as deposit, credit, insurance company penetration and bank branch penetration in rural areas of different states of India has been measured by accessing multidimensional approach to examine financial inclusion index 2018. From the research study, it is found that the states Puducherry, Daman & Diu, Chandigarh and Goa has Financial Inclusion at below average level (between 35-50) and the remaining states in India has financial inclusion at very low level in rural areas (Below 35).As concerned with rural population many states in India has financial inclusion at below average and lower level. The concern authorities from Indian Government should examine those states that are highly eliminated from accessing banking services to restructure the position of financial inclusion

Challenges Faced by Banks for Financial Inclusion

2021 ◽  
pp. 311-335
Author(s):  
Deepa Pillai ◽  
Ravi Kumar V. V.
Keyword(s):  
Rural Areas ◽  
Financial Literacy ◽  
Financial Services ◽  
Banking System ◽  
Financial Inclusion ◽  
Supply Side ◽  
Demand And Supply ◽  
Slum Dwellers ◽  
Primary Focus ◽  
Financial Awareness

The banking system in India significantly differs from that of other Asian nations due to unique geographic, social, and economic spread. In India, financially excluded sections largely comprise of marginal farmers, slum dwellers, migrants, women, self-employed, and senior citizens. There have been many formidable challenges in financial inclusion for bridging the gap between the demand and supply side. The chapter deliberates the challenges faced by banks for financial inclusion in context of infrastructure and institutional credit, risk perception, illiteracy, compliances, financial awareness, products, and services. Barriers to financial services expansion and product and service delivery in rural markets will be reviewed, and the primary focus will be on challenges with respect to marketing and delivery of financial services in rural areas. Reaching out to the excluded sections through financial literacy campaigns, and in the process marketing, the banks and their schemes would be an important step towards financial inclusion.

scholarly journals Development of Financial Inclusion of Agricultural Producers

2021 ◽  
pp. 162-170
Author(s):  
Ekaterina Shkarupa ◽  
Keyword(s):  
Financial Literacy ◽  
Financial Services ◽  
Poverty Reduction ◽  
Business Models ◽  
System Development ◽  
Financial Inclusion ◽  
Agricultural Producers ◽  
Budget Support ◽  
Basic Set ◽  
New Business

The limited involvement of firms in financial markets and a rather low level of financial literacy and absence of high-quality use of financial services are currently recognized as a fundamental issue. Recent research confirms that economic prosperity, sustainable development and poverty reduction are determined by the increased availability and use of financial services. All these circumstances have led to the emergence of another long-term trend in the financial sector which we define the concept of financial inclusion. Modern vectors of financial system development (emergence of new financial instruments, spread of new business models in the financial market, artificial intelligence, development and implementation of digitalization strategy) trigger discussions on the essence and content of financial inclusion. The article provides an overview of its available interpretations, and it is concluded that the theoretical basis of the research has not been developed properly. The presented literature review of approaches to financial inclusion definition makes it possible to show its main attributes: financial products and services, characteristics, quality, channels, conditions for obtaining a basic set of financial services. The main conclusions of the author prove that the mentioned aspects are met by the existing and functioning financial and credit infrastructure in agriculture, but with the peculiarities connected with the specifics of the industry. The article attempts to study the possibilities of such an infrastructure from the perspective of financial inclusion. Some indicators characterizing the infrastructure for provision of financial services in the southern regions presented in the article confirm the potential and opportunities for the development of financial inclusion of agricultural producers. Additionally, the author substantiates the issue of physical availability of this infrastructure, since it is difficult to assess the financial inclusiveness of agricultural producers from the standpoint of its parameters due to the specifics of agricultural production and the influence of various factors on the activities of a particular firm. The following directions are identified as possible ones for the development of financial inclusion of agricultural producers: expansion of budget support, implementation of public private partnership projects, increase of financial literacy, development strategies, development of government programs and projects, and active use of digitalization opportunities.

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