Effect of Financial Technology Loans on Financial Inclusion Among the Unbanked Low-Income Earners in Makueni County

2021 ◽  
Vol 3 (2) ◽  
pp. 1-12
Author(s):  
Samson Mutuku Mule ◽  
Fredrick Wafula ◽  
Nickson Agusioma
Keyword(s):  
Economic Growth ◽  
Low Income ◽  
Rural Areas ◽  
Financial Services ◽  
Small Businesses ◽  
Sampling Technique ◽  
Target Population ◽  
Financial Inclusion ◽  
Primary Data ◽  
Financial Technology

Financial inclusion is crucial in fostering individual prosperity, poverty eradication and stimulating economic growth. It is therefore a major policy concern for majority of governments across the world. Despite the rampant growth of financial technology in Kenya, the number of adults who are financially excluded is still high among the rural area residents. Lack of financial services access in rural areas has resulted to rural economic growth retardation and inequality. Further, financial exclusion has led to increased poverty levels because those excluded have been forced to depend on their limited savings to pursue their entrepreneurial interests. Small businesses have had no choice but to rely on their inadequate earnings to pursue viable business opportunities. The main objective of this study was to establish the effect of financial technology loans on financial inclusion among the unbanked low-income earners in Makueni County. Descriptive research design was used, with the target population being the unbanked low-income earners over the age of 18 in Makueni County. A sample size of 384 respondents was chosen using the convenience sampling technique. Personal interviews were conducted using an interview guide to collect primary data. The study found that fintech loans have a positive and significant effect on financial inclusion among the unbanked low-income earners in Makueni County. According to the findings of the study, since the unbanked people in Makueni County associate the use of financial technology loans to meeting personal financial needs and especially coping up with day-to-day expenses and emergencies, this study recommends that such people embrace the use of the fintech loans more as it will aid them in improving their financial lives to a greater extent. This is because for instance, by using the fintech loans, they can create employment for themselves and generate sufficient income by financing micro businesses using this credit.

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.

scholarly journals The Nexus between Mobile Money Regulation, Innovative Technology and the Promotion of Financial Inclusion in Zimbabwe

2021 ◽  
Vol 24 ◽  
pp. 1-33
Author(s):  
Howard Chitimira ◽  
Elfas Torerai
Keyword(s):  
Low Income ◽  
Rural Areas ◽  
Financial Services ◽  
Banking Sector ◽  
Regulatory Framework ◽  
Financial Inclusion ◽  
Innovative Technology ◽  
Technological Innovations ◽  
Mobile Money ◽  
The Poor

The advent of mobile money innovations has given people in rural areas, informal settlements and other poor communities an opportunity to participate in Zimbabwe's mainstream financial economy. However, the technology-driven money services have presented some challenges to the traditional banking sector in general and the regulation of financial services in particular. Firstly, most mobile money services are products of telecommunication corporations, which are not banks. Telecommunication companies use their network reach to provide mobile money services via mobile devices at a cheaper cost than banks across the country in Zimbabwe. As such, banks face unprecedented competition from telecommunications companies that are venturing into financial services. It also appears that prudential regulation of banks cannot keep up with the fast pace at which technological innovations are developing and this has created a disjuncture between the regulation and the use of technological innovations to promote financial inclusion in Zimbabwe. The Banking Act [Chapter 24:20] 9 of 1999, the Reserve Bank of Zimbabwe Act [Chapter 22:15] 5 of 1999 and the National Payment Systems Act [Chapter 24:23] 21 of 2001 have a limited scope in terms of the regulation of mobile money services in Zimbabwe. The Ministry of Finance and Economic Development launched the National Financial Inclusion Strategy (NFIS) 2016-2020 to provide impetus to the financial inclusion of the poor, unbanked and low-income earners in Zimbabwe. However, the NFIS appears to push more for bank-led financial inclusion than it does for innovation-driven initiatives such as mobile money services. This article highlights the positive influence of mobile money services in improving financial inclusion for the poor, unbanked and low-income earners in Zimbabwe. The article also seeks to point out gaps and flaws in the financial services regulatory framework that may limit the potential of mobile money services to reach more people so that they actively participate in the Zimbabwean economy. It is submitted that the Zimbabwean mobile money services regulations and the financial regulatory framework should be carefully amended in line with the recent innovations in mobile money to adequately regulate the use of mobile money services and innovative technology to address the financial exclusion of the poor, unbanked and low-income earners in Zimbabwe.

scholarly journals Customers‟ Perception of India Post Towards Financial Inclusion Services with Reference to Ariyalur District

2019 ◽  
Vol 8 (12) ◽  
pp. 1119-1128
Keyword(s):  
Low Income ◽  
Financial Services ◽  
Financial Inclusion ◽  
Primary Data ◽  
Post Office ◽  
Customer Perception ◽  
Aged Person ◽  
The Mean ◽  
Convenience Sampling ◽  
One Way Anova

Financial Inclusion can be influenced by the customer perception such as availability of all financial inclusion services in all branch, reliable and prompt services, Affordable price, Post office staffs interact With friendly ( Accessible ) Safety and security transaction, affordable financial services, Simplicity procedure, Responsible to query, conveniently service under convenience sampling method were adopted. The primary data were collected with 50 Respondents of post office customers with the help of well structure close ended and 5 point likert scale questionnaire which consists of parameters to measure the perception variables. The collected data were analyses with the help of the mean rank and one way ANOVA analysis for validating the assumptions made by researchers. The study therefore done found that customers perception variable of post towards financial Inclusion processes were confirmed that the customers perception India variables had some effect on satisfaction of India post towards financial inclusion services. But, aged person, illiterate people, women , low occupation person and low income person have to attention and be conducted awareness camp. This may increase the financial inclusion in post office

scholarly journals Exploring the Development of Financial Inclusion in the Context of Financial Technology

2021 ◽  
Vol 4 (4) ◽  
pp. 104-111
Author(s):  
Ziyi Cheng
Keyword(s):  
Economic Growth ◽  
United Nations ◽  
Financial Services ◽  
Banking Industry ◽  
Financial Inclusion ◽  
Family Enterprises ◽  
The United Nations ◽  
Financial Technology

The concept of inclusive finance was proposed and promoted by the United Nations in 2005 with the main purpose of providing services for those who lack good financial services while promoting the economic growth of family enterprises and eliminating social poverty as well as inequality. With the innovation of financial technology and its application in the field of financial inclusion, the new inclusive finance has shown strong vitality and great prospects in recent years. It provides certain ideas and directions for the development of inclusive finance in the banking industry.

scholarly journals THE ROLE OF COMMUNICATION IN SACCOS IN PROMOTING FINANCIAL INCLUSION IN KENYA

2020 ◽  
Vol 4 (2) ◽  
Author(s):  
Rose Ndegwa
Keyword(s):  
Low Income ◽  
Target Population ◽  
Financial Inclusion ◽  
Inclusive Development ◽  
Primary Data ◽  
Service Access ◽  
Financial Exclusion ◽  
Socially Excluded ◽  
Descriptive Survey

<p>Financial inclusion is a prerequisite to economic development. This has been echoed by international as well as national bodies. Studies have shown that financial exclusion has its roots in social exclusion. This indicates the depth and importance of financial inclusion in creating inclusive development. Numerous studies have revealed levels of financial inclusion with limited studies performed on the role of SACCO initiatives on financial inclusion. This research examined measures of financial inclusion which include both access and usage of financial products by low income earners and the socially excluded via SACCOs. Since access and usage are supplementary, they reflect a more vivid picture of financial inclusion. The study sought to analyze the role of SACCOs in promoting financial inclusion in Kenya. The study was guided by the three specific objectives: geographical coverage of SACCOs; cost and contribution of SASRA regulations towards enhancing financial inclusion. To achieve the objectives of the study a descriptive survey research was adopted. The target population was the three SACCOs in Meru town. 43 questionnaires were issued to SACCO members to access the level of financial service access. Primary data was analyzed with aid Microsoft excel software to generate frequencies, mean and percentages. Pie charts, graphs and tables were used to present various aspects of the variables. Content analysis was used to analyze qualitative while quantitative data was analyzed using descriptive statistics.</p><p> </p><p><strong>JEL: </strong>O10; O20; G10; G20</p><p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/edu_01/0663/a.php" alt="Hit counter" /></p>

Paving the Way for the Development of FinTech Initiatives in ASEAN

2020 ◽  
pp. 80-107 ◽  
Author(s):  
Mahani Hamdan ◽  
Muhammad Anshari
Keyword(s):  
Economic Growth ◽  
Financial Services ◽  
Millennial Generation ◽  
Financial Inclusion ◽  
Innovative Technology ◽  
Financial Policies ◽  
Practical Applications ◽  
Internet Penetration ◽  
Shed Light ◽  
Financial Technology

Financial technology (FinTech) is not one to be ignored under any circumstances. It is not only growing as a concept but a phenomenon that has been manifested in non-financial sectors using innovative technology to bring financial services straight to the customers. The creation and practical applications of FinTech supported by government regulations and financial policies, high mobile adoption, rising rates of internet penetration, and increasingly literate and millennial generation, strongly indicates that the various scopes of FinTech in ASEAN are very promising in supporting economic growth and financial inclusion. This chapter will provide an overview of FinTech and examine the development of FinTech initiatives to shed light on some challenges and solutions facing the ASEAN's financial landscape today and in the future.

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 Relationship lending and access to financial services by SMEs in Kenya

2021 ◽  
Vol 10 (5) ◽  
pp. 235-244
Author(s):  
Edward Kiring'a ◽  
Fredrick W.S. Ndede ◽  
Argan Wekesa
Keyword(s):  
Financial Services ◽  
Small And Medium Enterprises ◽  
Critical Role ◽  
Sampling Technique ◽  
Credit Rationing ◽  
Target Population ◽  
Primary Data ◽  
Relationship Lending ◽  
Lending Institutions ◽  
Medium Enterprises

Policymakers and scholars acknowledge the significance of small and medium enterprises in stirring the economic growth and development in developing and developed economies. In spite of the generally fast pace by which access to financial services for small and medium enterprises is being established, significant segments of the small and medium enterprises sector do not yet benefit from the expansion. This study, therefore, investigated the effect of relationship lending on access to financial services by small and medium enterprises in Kenya. The study was based on credit rationing theory and information asymmetry theory. The target population comprised 4,253 small and medium enterprises in Kenya. A sample size of 366 SMEs was used by the study. The study adopted a multistage sampling technique to obtain the SME respondents. Primary data was utilized and was acquired through semi-structured questionnaires. Data were analyzed using descriptive and inferential statistics utilizing Heckman two-stage regression model. The study findings showed that relationship lending had a positive and significant effect on access to financial services among SMEs in Kenya. The study concluded that relationship lending plays a critical role in access to financial services by SMEs in Kenya. The study recommends that SMEs owners should strive to meet the terms and conditions provided by lending institutions in their various financing practices while management of the lending institutions should adopt financing practices favorable to SMEs to increase their access to financial services.

scholarly journals A Legal Analysis of the Use of Innovative Technology in the Promotion of Financial Inclusion for Low-Income Earners in South Africa

2021 ◽  
Vol 24 ◽  
pp. 1-27
Author(s):  
Howard Chitimira ◽  
Phemelo Magau
Keyword(s):  
South Africa ◽  
Financial Institutions ◽  
Low Income ◽  
Rural Areas ◽  
Financial Services ◽  
Informal Settlements ◽  
Financial Inclusion ◽  
Innovative Technology ◽  
Financial Exclusion ◽  
The Government

The promotion of financial inclusion is important for the combating of financial exclusion in many countries, including South Africa. Nonetheless, most low-income earners living in rural areas and informal settlements are still struggling to gain access to basic financial products and financial services in South Africa. This status quo has been caused by a number of factors such as the absence of an adequate financial inclusion policy, the geographical remoteness of financial institutions to most low-income earners, rigid identity documentary requirements, a lack of access to reliable and affordable Internet connection by low-income earners living in informal settlements and rural areas, a lack of financial illiteracy, the high costs of financial services, unemployment and poverty, over-indebtedness, and cultural and psychological hindrances to low-income earners in South Africa. Consequently, these factors have somewhat limited the access to financial services offered by financial institutions to low-income earners living in rural areas and informal settlements. In many countries, including South Africa, the financial sector is relying on innovative technology, especially in banking institutions, to aid in the offering of financial services to their customers. It is against this background that this article discusses selected legal and related challenges affecting the regulation and use of innovative technology to promote financial inclusion for low-income earners in South Africa. The article further discusses possible measures that could be adopted by the government, financial institutions and other relevant regulatory bodies to promote the use of innovative technology to combat the financial exclusion of low-income earners in South Africa.

scholarly journals Rural-Urban Financial Literacy Divide in India: A Comparative Study of Kerala and Uttar Pradesh

2021 ◽  
pp. 14-24
Author(s):  
N. P. Abdul Azeez ◽  
M. Nasira Banu
Keyword(s):  
Rural Areas ◽  
Financial Literacy ◽  
Financial Services ◽  
Formal Education ◽  
Uttar Pradesh ◽  
Sampling Technique ◽  
Primary Data ◽  
Rural People ◽  
Multi Stage ◽  
Financial Decision

One of the significant competencies required in the contemporary scenario is an awareness or knowledge of varied financial affairs and the skill to handle matters apropos of finance. The dearth of financial literacy precludes rural people from the country's formal financial system and created a rural-urban financial divide, especially in the digitalized era. Effective incorporation of financial literacy in formal education will lead to greater access to financial services. This paper tries to find the rural-urban financial literacy divide based on the primary data collected from two states of India, namely Kerala and Uttar Pradesh. A total of 400 samples respondents were taken by using the multi-stage sampling technique. A comprehensive approach for measuring financial literacy is developed by constructing the Financial Literacy Index (FLI), which comprises financial knowledge, financial behaviour, and financial attitude. The results concluded with the rural-urban financial literacy divide findings as the financial literacy in rural areas is consistently lower than in urban. The results expose the need for a persistent and prolonged intervention from all the stakeholders, including policymakers, to enhance and sustain financial literacy to accomplish a bright financial decision making by the rural people.

Sign in / Sign up

Export Citation Format

Share Document