scholarly journals Barriers to Access to and Usage of Financial Services in Ethiopia

2017 ◽  
Vol 7 (1) ◽  
pp. 139 ◽  
Author(s):  
K. Sambasiva Rao ◽  
Andualem Ufo Baza
Keyword(s):  
Low Income ◽  
Financial Services ◽  
Financial Institution ◽  
Fixed Cost ◽  
Physical Point ◽  
Fixed Charges ◽  
Barriers To Access ◽  
Financial Exclusion ◽  
Low Income Groups ◽  
Regulatory Barriers

We study the interplay between financial exclusion and barriers to inclusion. Our model shows that financially excluded individuals are exposed to barriers to inclusion that prohibit their access to financial services even in absence of voluntary exclusion. We call these situation “involuntary exclusion,” since people lack access to and use of financial services due to barriers to inclusion that are otherwise overlooked social exclusion. We show that barriers to inclusion are more likely to occur when lack of access to physical point of financial services, poverty, lack of credit, prohibitive fixed cost of transacting at financial institution, legal and regulatory barriers and low competition among financial institutions. We analyze financial exclusion as a function of barriers to inclusion, examining the trade-off between unbanked adults and barriers to banking. We verify the model’s prediction that financial exclusion is more likely to occur among low income individuals in which assets holdings are low, as well as individuals who are too far away from physical point of access and those individuals who cannot afford bank fixed charges, than others. We also show that individuals are more likely to be financially excluded (relative to others) in low income groups in which barriers to inclusion are more frequent. 

IMPACTS OF FINANCIAL INCLUSION ON POVERTY AND INCOME INEQUALITY IN DEVELOPING ASIA

2021 ◽  
pp. 1-17
Author(s):  
WARATTAYA CHINNAKUM
Keyword(s):  
Developing Countries ◽  
Income Inequality ◽  
Low Income ◽  
Financial Services ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Principal Component ◽  
Financial Inclusion ◽  
Poor Households ◽  
Low Income Groups

This study investigates the impacts of financial inclusion on poverty and income inequality in 27 developing countries in Asia during 2004–2019 based on a composite financial inclusion index (FII) constructed using principal component analysis (PCA). The generalized method of moments (GMM) was employed for the estimation. The results show that financial inclusion can influence the reduction in both poverty and income inequality. The empirical findings also reveal the contribution of such control variables as economic growth in decreasing income disparity and trade openness in helping improve the standard of living of poor households despite its tendency to co-vary with income inequality. The present empirical evidence supporting the role of financial inclusion in reducing poverty and income inequality in developing countries has led to a policy implication that financial sector development should focus on the availability, usage, and depth of credit to cover all poor households or low-income groups to help improve their access to financial services, enable them to increase their income, and reduce the income gap between poor and rich households.

scholarly journals Legal Consequences for the Execution of Foreclosed Collateral (AYDA), Both for the Ownership of Collateral and for the Bank

2019 ◽  
Vol 6 (10) ◽  
pp. 124
Author(s):  
Defrianta Sukirman ◽  
Kurnia Warman ◽  
Ulfanora Ulfanora
Keyword(s):  
Low Income ◽  
Financial Services ◽  
Financial Institution ◽  
Islamic Banking ◽  
Minimum Level ◽  
Legal Risk ◽  
Legal Risks ◽  
The Republic ◽  
Legal Sociology ◽  
Legal Consequences

As a sharia financial institution that carries out the intermediation function, Islamic banking has a risk of financing problems. This problematic financing does not only have an impact on the low income as a business institution, and ultimately results in the soundness of the bank. Settlement of problem financing is always sought in an efficient and effective way, with a minimum level of legal risk. This settlement effort is certainly inseparable from the provisions of the Islamic banking law, the the mortgages Act and the regulations of the financial services authority. One of the efforts to resolve the problematic financing allowed by the sharia banking law, and the regulation of the financial services authority is the Foreclosed Collateral (AYDA), even though this effort is contrary to the provisions of the mortgages Act. The problems in this thesis are four, namely first, the process of binding financing that is burdened with mortgagerights at PT. Bank Syariah Bukopin, Bukittinggi Branch. Secondly, the debt settlement process in financing encumbered with Foreclosed Collateral(AYDA) at PT. Bank Syariah Bukopin, Bukittinggi Branch. Third, concerning the legal consequences of the Foreclosed Collateral (AYDA), both for the ownership of collateral and for the Bank. Fourth, regarding the realization of the sale of Foreclosed Collateral (AYDA). This thesis research uses a sociological juridical research method, which moves from the existence of norm conflicts between laws and regulations related to efforts to resolve problematic financing by means of Foreclosed Collateral (AYDA), including its implementation at PT. Bank Syariah Bukopin, Bukittinggi Branch. The approach in legal sociology research, using the legislative approach and implementation practices, is carried out by reviewing and analyzing regulations regarding AYDA and implementation and the legal consequences of AYDA implementation. The results of the study indicate that the implementation of the AYDA is contrary to the mortgages Act and has legal risks in the form of null and void. For this reason, it is recommended that the implementation of the AYDA be avoided and steps taken to adjust the applicable provisions. This is to avoid not only legal risk for banks and customers as executors of existing regulations, but also to ensure the certainty and effectiveness of the laws that apply in the Republic of Indonesia.

Low-Income Households and Credit: Exclusion, Preference, and Inclusion

1996 ◽  
Vol 28 (8) ◽  
pp. 1345-1360 ◽  
Author(s):  
J Ford ◽  
K Rowlingson
Keyword(s):  
Low Income ◽  
Financial Services ◽  
Economic Life ◽  
Mail Order ◽  
Costs And Benefits ◽  
Financial Exclusion ◽  
Low Income Households

In this paper it is suggested that current debates on financial exclusion are often too narrowly drawn and institutionally focused. As a consequence, less recognition is given to the availability and use of other regulated financial services such as mail order and moneylending. Drawing on data from a number of recent studies, the authors explore the structures and processes involved in the provision and use of these additional credit sources and assess their costs and benefits. It is suggested that alongside institutional exclusion are processes of self-exclusion, and also inclusion. The implications of such credit patterns for social and economic life in low-income communities are raised.

scholarly journals Legislative and Other Selected Challenges Affecting Financial Inclusion for the Poor and Low Income Earners in South Africa

2020 ◽  
Vol 64 (3) ◽  
pp. 337-355
Author(s):  
Howard Chitimira ◽  
Menelisi Ncube
Keyword(s):  
South Africa ◽  
Low Income ◽  
Financial Services ◽  
Banking System ◽  
Financial Inclusion ◽  
The Poor ◽  
Financial Exclusion ◽  
Relevant Role ◽  
Legislative Framework ◽  
The Government

AbstractThis article discusses the challenges affecting the achievement of financial inclusion for the poor and low-income earners in South Africa. The concept of financial inclusion could be defined as the provision of affordable financial products and services to all members of the society by the government and/or other relevant role-players such as financial services providers. This article identifies unemployment, poverty, financial illiteracy, over-indebtedness, high bank fees, mistrust of the banking system, lack of relevant national identity documentation and poor legislative framework for financial inclusion as some of the challenges affecting the full attainment of financial inclusion for the poor and low-income earners in South Africa. Given these flaws, the article highlights the need for the government, financial institutions and other relevant stakeholders to adopt legislative and other measures as an antidote to financial exclusion and poverty challenges affecting the poor and low-income earners in South Africa.

scholarly journals The Akiba Mashinani Trust, Kenya: a local fund’s role in urban development

2018 ◽  
Vol 30 (1) ◽  
pp. 53-66 ◽  
Author(s):  
Jane Weru ◽  
Omondi Okoyo ◽  
Mary Wambui ◽  
Patrick Njoroge ◽  
Jacinta Mwelu ◽  
...  
Keyword(s):  
Low Income ◽  
Financial Services ◽  
Informal Settlements ◽  
Wealth Accumulation ◽  
Microfinance Institutions ◽  
Social Fabric ◽  
Financial Products ◽  
Community Project ◽  
Low Income Groups ◽  
Basic Infrastructure

This paper describes the funding and financial services provided by the Akiba Mashinani Trust (AMT) to support the Kenyan Homeless People’s Federation (Muungano wa Wanavijiji). Muungano is a federation of autonomous savings groups with over 60,000 members from informal settlements across Kenya. Savings are critical because they enable wealth accumulation, demonstrate the capacity of the community to repay loans and hence leverage additional resources, and build social capital among members. AMT is able to use these savings as seed capital for revolving funds at the community, city and national scales. The funds offer informal settlers a range of financial products, including community project loans, which allow savings groups to finance social housing, sanitation and basic infrastructure in an affordable way. Therefore, unlike formal banking and microfinance institutions, AMT positions its financial services within a broader effort to improve the physical and social fabric of urban informal settlements. The experiences of Muungano and AMT demonstrate the catalytic impact of establishing appropriate financial services geared towards low-income groups – and crucially, how the savings of low-income people can leverage government resources to achieve more inclusive cities.

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 PROGRESS OF FINANCIAL INCLUSION THROUGH FIPs OF SCHEDULED COMMERCIAL BANKS

2017 ◽  
Vol 5 (8) ◽  
pp. 146-157
Author(s):  
Mohana Krishna Irrinki ◽  
Kuberudu Burlakanti
Keyword(s):  
Low Income ◽  
Financial Services ◽  
Banking Sector ◽  
Credit Cards ◽  
Vital Role ◽  
Financial Inclusion ◽  
Inclusive Growth ◽  
Continuous Growth ◽  
Low Income Groups ◽  
Bank Accounts

All the stakeholders of the economy had identified the need and importance of financial inclusion in the overall development of any country. Banking sector plays a very vital role in the success of financial inclusion. Government and RBI had formulated various programs, schemes and financial services for the financial betterment of the low income groups. Various initiations were taken in implementing financial inclusion and banks were asked to set self-regulated targets through financial inclusion plans through which the unbanked villages across the country were assigned to various banks and these banks were asked to bring all the unbanked segments into the banking fold. The paper aims at the evaluation of financial inclusion through the various parameters considered for the growth of financial inclusion. The banks through the efforts of their branches and Business Correspondents have seen the continuous growth in opening the bank accounts, issue of Kisan Credit Cards & General Credit Cards and the volume and value of transactions in the bank accounts. Financial Inclusion Plans of the banks are helping a lot in moving towards inclusive growth.

scholarly journals CBO Based Microfinancing in Pakistan: Comparative Analysis of Akhuwat Foundation and Kashf Foundation

2021 ◽  
Vol VI (III) ◽  
pp. 9-18
Author(s):  
Muhammad Salman ◽  
Sana Malik ◽  
Fariha Tariq
Keyword(s):  
Low Income ◽  
Financial Services ◽  
Poverty Alleviation ◽  
Vital Role ◽  
Living Standard ◽  
Poor People ◽  
Mutual Support ◽  
Low Income Groups ◽  
The Relationship ◽  
Depth Interviews

Poverty is a risk to harmony, which results in the dismissal of human rights. Microfinance is a tool that is famous across the world as a solution to alleviate poverty. Through this tool, lowincome households can have permanent access to a range of high-quality and affordable financial services that are offered by a range of retail providers. Community-based organizations, commonly known as "CBO", play a vital role in providing microfinance to the needy group of people, which determined the relationship between microfinance and poverty alleviation. This research presents a comparative study between Akhuwat Foundation and Kashf Foundation microfinance models for providing housing finance to low-income groups. A qualitative approach has been applied to determine the relationship between microfinance and poverty alleviation. In-depth interviews are conducted with working staff and borrowers of Akhuwat Foundation and Kashf Foundation (microfinance organizations). The research concludes that both organizations strive to alleviate poverty and to enhance the living standard of low-income people through mutual support in the system. The study also suggests that these organizations should need to emphasize more on the diversified needs of the poor people and must aim to serve the most extremely poor strata of the population.

scholarly journals FINANCIAL INCLUSION AND WOMEN EMPOWERMENT: A GENDER PERSPECTIVE

2018 ◽  
Vol 6 (5) ◽  
pp. 229-237
Author(s):  
Bincy George ◽  
K.T. Thomachan
Keyword(s):  
Low Income ◽  
Financial Services ◽  
Financial Inclusion ◽  
Women Empowerment ◽  
Bank Account ◽  
Banking Services ◽  
Income Groups ◽  
The Social ◽  
Social And Economic Development ◽  
Low Income Groups

This paper examines women empowerment associated with financial inclusion. Financial inclusion is delivery of banking services at an affordable cost to the vast sections of disadvantaged and the low-income groups. The various financial services include access to saving, credit, insurance, bank account etc. The access to financial services helps women in their social and economic development. It is noted that access to financial service through financial inclusion do have impact upon the social and financial empowerment of women leading to their overall empowerment.

A Study on Role of Financial Inclusion on Regional rural Banks with Reference to Kerala Gramin Bank

2021 ◽  
pp. 115-119
Author(s):  
Jithu George ◽  
Rashmi. R
Keyword(s):  
Correlation Analysis ◽  
Low Income ◽  
Financial Services ◽  
Secondary Data ◽  
Financial Inclusion ◽  
Vulnerable Groups ◽  
Easy Access ◽  
Dependent Variables ◽  
Low Income Groups

In simple words financial inclusion is defined as “the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost” (Rangarajan, 2008). The main aim of financial inclusion (FI) is to provide easy access to financial services to the underprivileged population of country. It is an attempt to raise the underprivileged population by making available of finance and there by achieving inclusive growth. This paper studies the financial inclusion of regional rural banks in Kerala. Both primary and secondary data used for the study.197 respondent’s data were collected through questionnaire and surveys. The research methodology used in this study was correlation analysis and descriptive statistics. The result of the correlation analysis shows there is positive correlation between independent and dependent variables also the peoples were aware about the inclusions that introduced and newly adapted by the banks. So, the aim of this study is to understand the various financial inclusion measures taken and its impact on creating awareness, benefits and better services to its customers by KGB.

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