scholarly journals Analysis of financial literacy and its effects on financial inclusion in Uganda

2021 ◽  
Vol 10 (3) ◽  
pp. 67-83
Author(s):  
Jason Kasozi ◽  
Daniel Makina
Keyword(s):  
Financial Literacy ◽  
Developing Economies ◽  
Logistic Models ◽  
Principal Component ◽  
Financial Inclusion ◽  
Demand Side ◽  
Ceteris Paribus ◽  
Mobile Money ◽  
Novel Approach ◽  
Cross Country

The paper investigates whether financial literacy influences financial inclusion in Uganda on the premise that there are currently few to no studies that investigate this causality and the general lack of consensus on an appropriate measure for financial literacy. It uses data from the FinScope (2018) consumer survey on Uganda and applies Principal Component Analysis (PCA) to construct a composite financial literacy index of the adult bankable population (16 years and older). The index is then regressed - alongside other demand-side control variables, against a measure of financial inclusion using logistic models. Our measure of financial literacy significantly and positively affects financial inclusion in Uganda even in the presence of variables like age, gender, income, and education. Individuals who make financial ends meet, plan for their financial future welfare, seek financial advice, and are receptive towards technology, are 'ceteris paribus', more likely to be financially included than not. Technology and mobile money adoption enhance financial inclusion while more men are financially included than women. While the dataset is limited to demand-side variables of Uganda and cannot be generalised, comparative cross-country studies with robust datasets are needed to provide further insights. The paper advances a novel approach for measuring financial literacy for developing economies while contributing to efforts to standardize an international measure. It also provides empirical insights to support the notion that financial literacy should be addressed more holistically and recommends this approach for improving financial inclusion in Uganda and globally.

Mobile Money - A Catalyst for Financial Inclusion in Developing Economies: A Case Study of Zimbabwe using FinScope Survey Data

GIS Business ◽  
2016 ◽  
Vol 12 (4) ◽  
pp. 45-56
Author(s):  
Kingstone Mutsonziwa ◽  
Obert K. Maposa
Keyword(s):  
Rural Communities ◽  
Developing Economies ◽  
Adult Population ◽  
Financial System ◽  
Financial Inclusion ◽  
Viable Option ◽  
Mobile Money ◽  
Bank Branches ◽  
Financial Transactions

Mobile money in Zimbabwe has extensively extended the frontiers of financial inclusion to reach millions who were earlier excluded within a relatively short space of time. The growing use of mobile phones in transferring money and making payments has significantly altered the countrys financial inclusion landscape as millions who had been hitherto excluded can now perform financial transactions in a relatively cheap, reliable and secure way. The FinScope results found out that 45% of the adult population use mobile money services. Of those using mobile money, 65% mentioned that is convenient, while 36% mentioned that it is cheap. Mobile money is accessible. These drivers are in the backdrop of few or no bank branches in rural communities as well as time and cost of accessing the bank branches. In Zimbabwe, mobile money is mostly used as a vehicle for remittances. While some people are enjoying mobile money services, it is important to mention that there are still people who are excluded from the formal financial system. The reasons why people do not use mobile money are mainly related to poverty issues. Mobile money remains a viable option to push the landscape of financial inclusion in Zimbabwe and other emerging markets where the formal financial system might not be strong.

Demand-side Factors for Financial Inclusion: A Cross-country Empirical Analysis

2019 ◽  
Vol 56 (2-3) ◽  
pp. 163-185 ◽  
Author(s):  
Rigzin Yangdol ◽  
Mandira Sarma
Keyword(s):  
Individual Characteristics ◽  
Financial Inclusion ◽  
Specific Factor ◽  
Supply Side ◽  
Demand Side ◽  
Explanatory Variables ◽  
Factors Associated ◽  
Per Capita ◽  
Cross Country ◽  
Country Specific

The importance of an inclusive financial system in the overall growth and economic development of a nation is well recognized. While most studies on financial inclusion use supply-side data, this article presents a demand-side analysis of factors associated with financial inclusion. Making use of a large cross-country data on financial inclusion status and individual characteristics of adult individuals, we econometrically establish that individual characteristics and economic circumstances play very significant role in determining financial inclusion of adult individuals, after taking into account other factors of the country. The article uses three indicators of financial inclusion and several explanatory variables such as country-specific factor (gross domestic product [GDP] per capita), individual characteristics and individual economic circumstances of adult individuals from different countries. We find that in general, being woman, less educated, jobless and poor are negatively associated with financial inclusion of individuals. Enhanced level of education and income, in general, enhances likelihood of financial inclusion. These findings should be taken into account while formulating policies towards promotion of financial inclusion.

Cross-country income variations and inclusive financing

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Nabeel Safdar ◽  
Tian Lin ◽  
Saba Amin
Keyword(s):  
Information Technology ◽  
Principal Component ◽  
High Income ◽  
Financial Inclusion ◽  
Middle Income ◽  
Content Type ◽  
Middle Income Countries ◽  
Cross Country ◽  
The Impact ◽  
Low And Middle Income

Purpose This study, a symposium, aims to explore the determinants of financial inclusion, impact of cross-country income-variations on financial inclusion, do high-income countries really uplift the financial inclusion and does the higher financial inclusion index indicate the larger economy? Design/methodology/approach This study adopts the panel data model to investigate the impact of high-income countries and low- and middle-income countries on financial inclusion. However, this study further adopts the principal component analysis rather than Sarma’s approach to calculate the financial inclusion index. Findings Based on the Data of World Bank, United Nations, International Monetary Fund, World Development Indicators, this study concludes that there is no nexus between income variations and financial inclusion, as the study reveals that some low- and middle-income countries have greater financial inclusion index such as Thailand (2.8538FII), Brazil (1.9526FII) and Turkey (0.8582FII). In low- and middle-income countries, the gross domestic product per capita, information technology and communication, the rule of law, age dependency ratio and urbanization have a noteworthy impact on financial inclusion that accumulatively describe the 83% of the model. Whereas, in high-income countries, merely, information technology and urbanization have a substantial influence on the growth of financial revolution and financial inclusion that describes the 70% of the total. Research limitations/implications The biggest limitation is the availability of data from different countries. Originality/value The originality of this paper is its technique, which is used in this paper to calculate the financial inclusion index. Furthermore, this study contributes to 40 different countries based on income, which could help to boost financial inclusion, and ultimately, it leads them toward economic growth.

scholarly journals Does financial literacy improve financial inclusion? Cross country evidence

2018 ◽  
Vol 111 ◽  
pp. 84-96 ◽  
Author(s):  
Antonia Grohmann ◽  
Theres Klühs ◽  
Lukas Menkhoff
Keyword(s):  
Financial Literacy ◽  
Financial Inclusion ◽  
Cross Country

scholarly journals Digital Development of Regions: Current Status and Prospects

2021 ◽  
pp. 4-12
Author(s):  
Olga Larina ◽  
◽  
Natalia Moryzhenkova ◽  
Keyword(s):  
Financial Literacy ◽  
System Analysis ◽  
New Technologies ◽  
National Development ◽  
Financial Inclusion ◽  
Current Status ◽  
Economic Interest ◽  
Country Comparison ◽  
Digital Development ◽  
Cross Country

The goal of the research is to define the prospects of further digital growth in Russia and to assess the current state of national digitalization. Global digitalization is an ongoing tactical project for the introduction of new technologies in all areas of activity, as well as a strategic direction that will influence Russia’s future position in the world. Currently, the level of development of digital processes in our country is at the middle or low level (judging by some parameters). The article presents a cross-country comparison of various indicators and indices of digitalization. Methods used for the research were comparative analysis, analysis of legal documents, system analysis of sources. Apart from cross-country comparison, the article compares digitalization processes, financial inclusion and growth of financial literacy among the population. As a result of the study, a conclusion about the interconnection of these processes is made. Thus, the digitalization contributes to the growth of the financial inclusion level, and, on the other hand, financial literacy contributes to financial inclusion, while the indicated inclusion stimulates the growth of the GDP. In addition to that, active use of digital services, being the foundation of national digitalization growth, is observed among the population with economic interest and availability of free savings. The authors believe that further digital growth requires higher economic interest of the population in these processes. The research results can be reasonably applied when planning state programs for the development of digitalization. The overall digital development of the state is shaped by the development of these processes in the regions. This requires consistent work at the level of the said regions that are very dissimilar, both economically and digitally. Assessment of “digital maturity” of regions is a long-run objective necessary for effective monitoring of national development goals.

scholarly journals Financial Literacy as a Driver of Financial Inclusion in Kenya and Tanzania

2021 ◽  
Vol 14 (11) ◽  
pp. 561
Author(s):  
Ashenafi Fanta ◽  
Kingstone Mutsonziwa
Keyword(s):  
Regression Analysis ◽  
Financial Literacy ◽  
Financial Services ◽  
Instrumental Variable ◽  
Financial Inclusion ◽  
Demand Side ◽  
Financial Products ◽  
Instrumental Variable Regression ◽  
Per Se ◽  
Using Data

Efforts are being exerted in many developing countries to promote financial inclusion by increasing individuals’ access to financial products and services. However, literature suggests that increasing the supply of financial products and services per se may not help in expanding financial inclusion unless concerted efforts are exerted in enhancing financial literacy. This is because financially literate individuals are more likely to appreciate the value of financial services and hence take up financial products. This paper reports the link between financial literacy and inclusion using data from a demand side financial inclusion survey conducted in Kenya and Tanzania in 2016 covering a total of 6029 individuals. Results from our instrumental variable regression analysis confirmed that financial literacy is a strong driver of financial inclusion. This implies that efforts to promote financial inclusion need to be accompanied with financial literacy campaigns in both countries.

Adoption and Use of Mobile Money Services in Nigeria

2018 ◽  
pp. 2724-2738 ◽  
Author(s):  
Olayinka David-West ◽  
Immanuel Ovemeso Umukoro ◽  
Omotayo Muritala
Keyword(s):  
Central Bank ◽  
Technology Acceptance ◽  
Empirical Evidence ◽  
Developing Economies ◽  
Adult Population ◽  
Financial Inclusion ◽  
Policy Makers ◽  
Mobile Money ◽  
Financial Exclusion ◽  
Target Set

Nigeria, like many developing economies has been fighting financial exclusion through different mechanisms and with financial inclusion target set at 80% by 2020 by its National Financial Inclusion Strategy, mobile money has been identified as a platform for achieving this goal. Consequently, twenty-one mobile money operators were licensed by the apex bank (Central Bank of Nigeria) to provide mobile money services to millions of Nigerians as a means of bridging the gap between the financially served, the under-served as well as the un-served. Using empirical evidence from two nationwide mobile money adoption and financial inclusion surveys, and a synthesis of technology acceptance and use models, this chapter explores the causes of mobile money adoption and extent of use across the adult population. It further provides recommendations to policy makers, mobile money operators and agents as well as institutions that support the enhancement of financial inclusion towards optimizing the benefits of mobile money and realization of the 80% financial inclusion target.

Sign in / Sign up

Export Citation Format

Share Document