The welfare impact of expanding access to bank accounts depends on whether accounts crowd out pre-existing financial relationships, or whether private gains from accounts are shared within social networks. To study the effect of accounts on financial linkages, we provided free bank accounts to a random subset of 885 households. Within households, we randomized which spouse was offered an account and find no evidence of negative spillovers to spouses. Across households, we document positive spillovers: treatment households become less reliant on grown children and siblings living outside their village, and become more supportive of neighbors and friends within their village.

The Effect of Savings Accounts on Interpersonal Financial Relationships: Evidence from a Field Experiment in Rural Kenya

Financial Technology or what is so-called “Fintech” is one of the prominent sectors that have been introduced by the Fourth Industrial Revolution at the beginning of the second millennium. The Fintech sector is providing a variety of innovative digitized financial activities in the aims of improving and facilitating traditional financial services as they are often faster, cheaper, easier to access. The rise and development of Fintech sector in today’s world is playing a crucial role in increasing the financial inclusion levels among individuals as well as among businesses, especially the Micro, Small and Medium Enterprises (MSMEs). Higher financial exclusion has a major negative impact on poverty and income distribution in societies. About 2.5 billion people and over 200 million businesses are still excluded from the formal financial system which is restraining economic growth, job creation and employment opportunities [13]. Similarly, in India, the figures of the unbanked population counted for 190 million adults without a bank account [13]. For a population size of more than 98 million people, 77% of adults in Egypt are not having a formal bank account [30]. The main objective of this study is to understand how the digitization of financial services can play a major role in increasing inclusive growth and entrepreneurship with a special emphasis on the Indian and Egyptian cases. This study is based on a theoretical and conceptual framework. The study examines various archival, reports of national and international organizations. The findings of the study are showing that the Fintech sector is having immense opportunities for enhancing entrepreneurship and economic growth in developing countries. The Fintech sector in Egypt is still new but rapidly expanding. In comparison with the successful Indian Experience, the digital financial ecosystem in Egypt is facing a major shortfall.

Fintech and Entrepreneurship Boosting in Developing Countries: A Comparative Study of India and Egypt

Financial well-being—the evaluation of current personal finances and expectations for the financial future—has gained attention in research, practice, and policy. Yet, there is no consensus on its conceptualization or its operationalization. The authors contribute to this area of research by proposing a conceptual framework and reassessing a measure used in data on subjective financial well-being from 16 countries. The findings highlight methodological concerns in international marketing studies and show not only financial well-being but also its measures to be context dependent. Furthermore, although many studies use unidimensional financial well-being measures, some conceptualizations have at least two components: a current and a future element. The authors analyze the effects of individual and contextual factors on current and future financial well-being and explore their possible interaction. They observe income to be a significant predictor of both components of financial well-being, while institutional settings are correlated with current financial well-being and national culture with future financial well-being. They conclude that initiatives aimed at increasing financial well-being need to clearly target either its current or its future component as their antecedents differ. 

Current and Future Financial Well-Being in 16 Countries

Nationalization of commercial banks in 1969 and subsequent developments led to financial inclusion by the banks. Despite the big expansion, the statistics on financial inclusion in India provide a very depressing picture. Out of over 600,000 rural habitations in the country, only about 30,000 or just 5% have a commercial bank branch. Just about 40% of the population across the country has bank accounts and this ratio is much lower in the northeastern part of the country. The proportion of people having any kind of life insurance cover is as low as 10%, and the proportion having non-life insurance is abysmally low at 0.6%. The basic objective of the notion of financial inclusion is to ensure formal banking facilities to the rural and unbanked households of the society and to see that they are self-confident and empowered. The present study analyzes the income level and banking habits of street hawkers in Pollachi, Tamil Nadu to find out whether the measures taken by the government and banks regarding inclusive growth have reached the street hawkers. The study underlines that the financial inclusion of vulnerable sections like street vendors is very much needed for real inclusive growth, as inclusive growth is only possible if there is active participation of the excluded section in the overall growth process.

An Enquiry into Financial Inclusion with Special Reference to Street Hawkers of Pollachi, Tamil Nadu

Considering the globalized nature of international financial markets and the important role of innovative entrepreneurial endeavors for employment and economic development, this paper analyzes the global supply and demand of entrepreneurial finance, in the form of individuals’ savings and borrowings for entrepreneurial ventures in the global economy. To this end, a theoretical treatment of the potential global entrepreneurial finance market (GEFM) dynamics, in response to governments and private sector financial transfers, is first provided. This is followed by the econometric modeling of such dynamics based on intertemporal random utility maximization, using pooled data from the 2014 and 2017 global financial inclusion surveys. The findings reveal, contrary to theoretical predictions, that private sector financial injections (i.e., electronic wage payments), exert an adverse effect on the GEFM; meanwhile, in accordance with theoretical predictions, public sector financial injections (i.e., electronic welfare payments), do positively influence the growth of the GEFM. In addition, compared to their male counterparts, females are found to be 7% more likely to own a formal account, and are 23.4% more likely to save for farming or business entrepreneurship, while also being 18.8% more likely to borrow for entrepreneurial ventures, therefore suggesting a relatively greater growth potential from female entrepreneurship in the global economy.

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Empirical Analysis of the Global Supply and Demand of Entrepreneurial Finance: A Random Utility Theory Perspective

The study attempts to explore the determinants of financial inclusion. Subsequently, it examines the effect of financial inclusion on financial well-being of marginalized street vendors in India.,The demand-side analysis of measuring financial inclusion with a sample of 371 marginalized street vendors is adopted. Both exploratory and descriptive research designs are employed in this study. The primary data collection is done by administering the structured interview schedule by using a convenience sampling technique. Confirmatory factor analysis (CFA) and structural equation modeling (SEM) are performed to describe the latent constructs and their hypothetical relationships with adequate empirical evidence.,Out of five dimensions of financial inclusion considered for the study, accessibility, availability, usage and affordability are found to be significant determinants of financial inclusion; however, the financial literacy dimension is found statistically insignificant. Further, the study results confirm that financial inclusion contributes substantially to the well-being of marginalized street vendors.,The outcome of the study will facilitate all the stakeholders including policymakers and financial institutions to enact policy guidelines to ensure financial well-being of the marginalized street vendors through financial inclusion initiatives.,Financial well-being through financial inclusion is possible even without the effect of financial literacy from the unorganized sector perspective specifically marglianized street vendors. Thus, it adds new dimension to the existing literature on demand side analysis of measuring financial inclusion.

Examining the influence of financial inclusion on financial well-being of marginalized street vendors: an empirical evidence from India


 The current study explores the determinants of digital financial inclusion (DFI) in India and also examines the influence of demographic characteristics on the accessibility and usage of digital financial inclusion. The data for this study was collected from the World Bank Global Financial Inclusion (Global Findex) database to find the determinants of digital financial inclusion from India's perspective. The study measured the accessibility and usage of digital financial inclusion in relation to selected demographic characteristics such as gender, age, income, education and employment status. The findings of the study revealed that individual’s socio-demographic factors such as gender, age, education, income and employment status have found a significant influence on the accessibility of digital financial inclusion. In addition, these factors have significant effect on usage of digital mode of financial transactions such as payments made and receipts through mobile phone or using the internet. The study provides valuable insights to the policymakers and service providers to improve the status of digital financial inclusion.

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Prabhakar Nandru

Papers

Examining the influence of financial inclusion on financial well-being of marginalized street vendors: an empirical evidence from India

Determinants of digital financial inclusion in India: Evidence from the World Bank’s global findex database