scholarly journals Financial Inclusion in Developing Countries: Applying Financial Technology as a Panacea

2021 ◽  
pp. 42-60
Author(s):  
Araniyar Isukul ◽  
Ben Tantua
Keyword(s):  
Developing Countries ◽  
Financial Development ◽  
Low Income ◽  
Quantitative Methods ◽  
Cost Effective ◽  
Financial Inclusion ◽  
Viable Option ◽  
Policy Objective ◽  
Banking Business ◽  
Financial Technology

Traditional banking methods of addressing the problem of financial inclusion in developing countries is not working efficiently. As it is becoming obvious, opening operational and functional banking business offices in many developing countries is not a financially viable option. Banking offices need enormous amounts of resources, equipment and personnel to run efficiently. In most developing countries were low income is the norm rather than the exception, it is not possible to sustain a policy objective that employs the use of banking business offices to address the problem of financial inclusion. Such initiative could start out well, however the possibility of sustainability is called into question. Thus, whatever meaningful gains have been garnered from such policy will be reversed or lost overtime. This research employs the use of quantitative methods and it sets out to test whether the usage of financial technology has had any meaningful impact in improving financial inclusion in the developing countries selected in the study. The findings of the research reveal that financial technology offers the instrument, tools and mechanism for drive financial inclusion in ways traditional methods of banking cannot. Financial technology offers, cost effective and cheaper means of driving financial development. This research suggests that financial technology should be used as a means of driving financial development in developing countries as it offers a more sustainable and cost-effective solution to the problem of financial inclusion. Developing countries, should embrace, adopt and adapt financial technologies to address their financial development issues.

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.

FINANCIAL INCLUSION THROUGH MICRO FINANCE

2021 ◽  
pp. 1-4
Author(s):  
P. Nagarajan
Keyword(s):  
Developing Countries ◽  
Low Income ◽  
Rural Areas ◽  
Banking Sector ◽  
Financial Inclusion ◽  
Vulnerable Groups ◽  
Poor People ◽  
Resource Base ◽  
Income Groups ◽  
Low Income Groups

Finance has become an essential part of an economy for development of the society as well as economy of nation. World leaders are embracing nancial inclusion at an accelerating pace, because they know that an inclusive nancial system that responsibly reaches all citizens is an important ingredient for social and economic progress for emerging markets and developing countries. Despite the political tailwind, half of the working-age adults globally – 2.5 billion people – remain excluded from formal nancial services. Instead, they have to rely on the age-old informal mechanisms of the moneylender or pawnbroker for credit or the rotating savings club and vulnerable livestock for savings. The pandemic has had a momentous impact on economies and societies around the world. At the same time, it has shown that, with the right approach, it is possible to protect and safeguard the economy. . Through Financial inclusion we can achieve equitable and inclusive growth of the nation. Financial inclusion stands for delivery of appropriate nancial services at an affordable cost, on timely basis to vulnerable groups such as low income groups and weaker section who lack access to even the most basic banking services. It helps in economic development as it widens the resource base of the nancial system by developing a culture of savings among large segment of rural population. Further, nancial inclusion protects their nancial wealth and other resources in exigent circumstances by bringing low income groups within the perimeter of formal banking sector. Financial inclusion engages in including poor people in the formal banking industry with the intention of securing their minimal nances for future purposes. Micronance has become a medium of extending nancial services to unbanked sections of population. Micronance is banking the unbankables, bringing credit, savings and other essential nancial services within the reach of millions of people who are too poor to be served by regular banks, in most cases because they are unable to offer sufcient collateral. In a country like India with almost 30% (more than 360 million) people still below poverty line and according to latest census gures, more than 70% or 840 million people living in rural areas with little or no access to formal banking and other nancial services, micronance has a big role to play in order to bridge this gap. The Micro Finance Institutions occupies key position in nancial inclusion through micro nance where the exclusion. In developing countries, the growth of micronance institutions (MFIs) which specically target low income individuals are viewed as potentially useful for promotion of nancial inclusion. Even though MFIs at present, mainly offer only credit products; as they grow, they are likely to expand their product range to include other nancial services.

scholarly journals Rural Accessibility, Rural Development, and Natural Disasters in Bangladesh

2019 ◽  
Vol 35 (3) ◽  
pp. 391-411 ◽  
Author(s):  
Saleh Ahmed ◽  
Elizabeth Eklund
Keyword(s):  
Developing Countries ◽  
Economic Development ◽  
Rural Development ◽  
Natural Disasters ◽  
Low Income ◽  
Rural Areas ◽  
National Development ◽  
Cost Effective ◽  
Rural And Urban ◽  
Social And Economic Development

Rural accessibility means more than just reliable roads and cost-effective transportation networks. Rural accessibility is critical for achieving social and economic development in low-income developing countries such as Bangladesh where both rural and urban development are constrained by significant infrastructural deficiencies. It is also an important factor that determines the effects of natural disasters on these resource-constrained societies, since both disaster responses and sustainable development are compromised by poor rural accessibility. Using two contrasting case studies from Bangladesh, this article reveals the significance of improved rural accessibility on rural development and the effects of natural disasters on rural areas. The findings of this article suggest that the improvement of rural accessibility should be a top national development priority, since it increases the opportunities for sustainable social and economic development and reduces the adverse effects of natural disasters on the rural areas in developing countries such as Bangladesh.

scholarly journals Pollution-Free Road Lighting

2001 ◽  
Vol 24 (3) ◽  
pp. 364-364 ◽  
Author(s):  
Duco A. Schreuder
Keyword(s):  
Developing Countries ◽  
Low Income ◽  
Road Traffic ◽  
Cost Effective ◽  
Low Income Countries ◽  
Industrialized Countries ◽  
Policy Makers ◽  
Beneficial Effects ◽  
Road Lighting ◽  
Technical Report

The beneficial effects of road lighting are often seen as very important. They relate to reducing road accidents and some forms of crime but also enhance the social safety of residents and pedestrians and the amenity for residents. Road traffic in developing countries is much more hazardous than in industrialized countries. Accident rates in ‘low’ income countries may be as much as 35 times higher than in ‘high’ income countries. Thus, it might be much more cost-effective to light roads in the developing world than in the industrialized world. Fighting light pollution is more pressing in developing countries as most of the major high-class astronomical observatories are there. Astronomical observations are disturbed by light from outdoor lighting installations, part of which is scattered in the atmosphere to form ‘sky glow’. The International Lighting Commission CIE has published a Technical Report giving general guidance for lighting designers and policy makers on the reduction of the sky glow.

scholarly journals Everyday experiences of digital financial inclusion in India's ‘micro-entrepreneur’ paratransit services

2021 ◽  
pp. 0308518X2110263
Author(s):  
Lucy Baker
Keyword(s):  
Developing Countries ◽  
Low Income ◽  
Global Economy ◽  
Poverty Reduction ◽  
Credit Scoring ◽  
Financial Inclusion ◽  
Policy Makers ◽  
Profit Margins ◽  
Informal Practices ◽  
Everyday Experiences

Self-employed labour in transportation is a notoriously precarious form of employment that occurs throughout many developing countries. In order to offset high-cost and insecure vehicle procurement arrangements, paratransit fare structures are formulated on the basis of a set of logics designed to maximise revenues. Although entrepreneurial, when these logics occur in conflict with public fare legislation, they are undertaken illegally, or informally, and are perceived as undesirable by policy makers and transport users. However, the underlying structures that necessitate these practices are seldom examined despite their significant effect on mobilities and the livelihood experiences of male entrepreneurs. This paper engages with critical literatures on the financialisation of poverty reduction to present financialisation as a class-based mechanism that, with the rapid increase of digital payment and ‘alternative’ credit scoring, structures micro-entrepreneurship and precarity in the neoliberal context of India. The paper argues that digitally enhanced financial inclusion techniques may steer low-income workers toward mainstream finance institutions modelled on the global economy. They enable profit to be generated by investors and private microfinance companies. However, new financial technologies do not do little to reduce the risk and expense of microfinance, nor do they increase micro-entrepreneurs' profit margins. Moreover, they threaten the informal practices entrepreneurs use to self-manage their financial precarity.

scholarly journals PERAN TEKNOLOGI FINANSIAL BAGI PEREKONOMIAN NEGARA BERKEMBANG

2019 ◽  
Vol 4 (1) ◽  
Author(s):  
Abdul Hadi Ilman ◽  
Gita Noviskandariani ◽  
Muhammad Nurjihadi
Keyword(s):  
Developing Countries ◽  
Developed Countries ◽  
Economic Life ◽  
Financial Inclusion ◽  
Main Category ◽  
Digital Society ◽  
Complex Technology ◽  
Simple Product ◽  
Financial Technology ◽  
Sophisticated Technology

The emergence of financial technology is rooted from developed countries with established infrastructure, sophisticated technology, and more digital society. While this is not the case for developing countries, fintech has found difficulties in penetrating developing countries and improving their financial inclusion. This research aims to find fintech best practices around the world and analyze how they could improve the economic life of people in developing countries. We divided into three main category of problems that fintech could contribute and give solution: lack of infrastructure, less digital society, and chaotic and informal society. Then we analyzed three fintechs represent the three categories: Flutterwave, Creditfix, and Malako. We found that these fintechs have been able to contribute to financial inclusion and economy because of these reasons: 1) the ability to find what people really need; 2) the ability to simplify the sophisticated and complex technology behind the simple product; and 3) the ability to collaborate with traditional financial service.

scholarly journals INDEKS KETERANGKUMAN KEWANGAN DI NEGARA SEDANG MEMBANGUN MENGGUNAKAN KAEDAH BUKAN PARAMETRIK DAN PARAMETRIK

2020 ◽  
Vol 5 (1) ◽  
pp. 80-103
Author(s):  
Rosmah Nizam ◽  
Zulkefly Abd Karim ◽  
Aisyah Abdul Rahman ◽  
Tamat Sarmidi
Keyword(s):  
Developing Countries ◽  
Principle Component Analysis ◽  
Parametric Method ◽  
Financial Inclusion ◽  
Supply Side ◽  
Demand Side ◽  
Principle Component ◽  
Index Value ◽  
Financial Technology ◽  
Non Parametric

Tujuan dan Latarbelakang: Kajian ini bertujuan membuat penambahbaikan pengiraan indeks keterangkuman kewangan dengan mengambilkira dimensi teknologi kewangan digital (fintech) dan menggunakan data daripada sebelah penawaran (supply-side) dan permintaan (demand-side) yang melibatkan negara sedang membangun terpilih bagi tahun 2014 dan 2017 (68 buah negara).   Metodologi: Untuk mengukur indeks keterangkuman kewangan, kajian ini menggabungkan kaedah bukan-parametrik melalui model ukuran multidimensi dan kaedah parametrik Analisis Komponen Utama (PCA).   Dapatan: Keputusan empirik kajian dengan menggunakan analisis PCA mendapati bahawa indeks keterangkuman kewangan yang dikemukakan dengan penambahbaikan dimensi fintech mempunyai kepentingan relatif dan hubungan yang signifikan terhadap tahap keterangkuman kewangan. Kajian ini menunjukkan nilai indeks yang tinggi menggambarkan tahap keterangkuman kewangan yang baik dan inklusif, manakala nilai indeks yang rendah adalah sebaliknya.   Sumbangan: Implikasi daripada kajian ini menunjukkan kepentingan penggubal dasar untuk membentuk strategi dalam konteks keterangkuman kewangan di sesebuah negara. Selain itu, akses kepada perkhidmatan teknologi kewangan digital harus diperluaskan untuk meningkatkan tahap kewangan yang lebih inklusif dan mencapai keterangkuman kewangan sempurna.   Kata kunci: Analisis komponen utama (PCA), bukan parametrik, fintech, indeks keterangkuman kewangan, multidimensi, parametrik.   ABSTRACT Background and Purpose: This paper aims to improve the construction of the index of financial inclusion with digital financial technology (fintech) dimensions, using supply-side and demand-side data from selected developing countries for 2014 and 2017 (68 countries).   Methodology: To measure the index of financial inclusion, this study combines non-parametric methods through the multidimensional measurement model proposed by Mandira Sarma (2012) and the Principle Component Analysis (PCA) as a parametric method.   Findings: The empirical findings of the study using PCA analysis found that improvement on proposed index of financial inclusion using fintech dimensions has a relative importance and significant relationship to the level of financial inclusiveness.  This study shows that the higher index value reflecting the more inclusive of financial inclusion, while the lower index value is vice versa.   Contributions: This study concludes that it is important for policy makers to shape policies and strategies within the context of financial inclusion in a country. In addition, access to digital financial technology services should be expanded to increase the level of financial inclusiveness and achieve complete financial inclusion.   Keywords: Financial inclusion index, fintech, multidimensional, non-parametric, parametric, Principle Component Analysis (PCA).   Cite as: Nizam, R., Abd Karim, Z., Abdul Rahman, A., & Sarmidi, T. (2020). Indeks keterangkuman kewangan di negara sedang membangun menggunakan kaedah bukan parametrik dan parametric [Financial inclusion index in developing countries using non-parametric and parametric method]. Journal of Nusantara Studies, 5(1), 80-103. http://dx.doi.org/10.24200/jonus.vol5iss1pp80-103

scholarly journals Tariff structuring in water and sanitation: public profiting arrangements on universalization initiatives

Water Policy ◽  
2021 ◽  
Author(s):  
Marcelo Motta Veiga
Keyword(s):  
Developing Countries ◽  
Low Income ◽  
Local Governments ◽  
Public Services ◽  
Cost Effective ◽  
Low Income Countries ◽  
Project Finance ◽  
Service Access ◽  
Water And Sanitation ◽  
Tariff Structure

Abstract Water and sanitation service access is a global problem, impacting disproportionally poor communities of low-income countries. Failed universalization initiatives highlighted historical negligence, social inequality, and bad governance. Infrastructure developments require large investments, which most local governments cannot afford. Alternative funding might come from private investors through cost-effective project finance arrangements. Public services should be sustainable, conciliating users' willingness to pay with providers' willingness to supply. Governments have implemented profit-driven strategies over taxing outsourced public services to increase budget inflow. Inefficient tax schemes on essential public services have damaged universalization initiatives in developing countries. These negative taxing practices have damaged tariff structure, service sustainability, and project attractiveness. Public sector should not profit from unsustainable outsourced services that they are required but cannot supply. Water and sanitation expansions on low-income communities in developing countries should not take place as tariff-free schemes, but within a tax-exempt policy.

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.

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