Financial sector development

About: Financial sector development is a research topic. Over the lifetime, 1674 publications have been published within this topic receiving 90787 citations.

Rwanda - Raising productivity and reducing the risk of household enterprises : fieldwork report

Abstract: This project was undertaken so that an understanding could be developed to enable policies, strategies programmes and projects to be developed for raising the productivity and reducing the risks of household enterprises. They form by far the largest segment of the private-sector both in terms of number of enterprises and number of people employed yet no research had been undertaken specifically on the sector and the Government had paid little attention to developing policy tailored to meet its specific needs. However, if the Government is to realise its vision of becoming a private-sector service-led economy, reduce poverty and provide employment for all, it is going to have to support the growth of HEs. Growing the HE sector is the only way in which the increasingly large pool of surplus labour can be absorbed into the labour market and poverty can be reduced.

Financial Inclusion, Governance and Institution: Evidence from Developing Economies

Abstract: This paper argues that strong economic governance and institution are important elements in improving financial inclusion especially in developing countries with relatively large segment of poor population because markets, and economic activity and transactions more generally, cannot function well in its absence. Financial inclusion has become an important global agenda and emerging priority for policymakers and regulators in financial sector development in ensuring sustainable long-term economic growth. Many factors hinder the access and use of financial services among the population in many part of the world. The main obstacles can broadly be characterised as follows: i) social, macroeconomic, and infrastructure features; ii) institutional weakness; iii) obstacles arising from banking activities; and iv) regulatory distortion. Governments are not solely responsible for designing an appropriate policy framework that encourages access to financial services, but financial institutions offering these services must also play a decisive role. The literature on financial inclusion has identified two major factors that drive financial inclusion across countries: i) structural factors, which primarily determine the costs of providing financial services to the population; and ii) policy-related factors have also been found to be relevant in creating an enabling environment for financial inclusion (Love and Martinez Peria 2012). However, research addresses on the latter is limited particularly pertaining to developing countries. Without deeper understanding on these issues can creates the condition for ill-informed policy designs. Hence, this paper contribute to literature by examining the interlinkage between financial inclusion, institutions, governance and Islamic financial services industry using panel data analysis. The research will provide understanding of the impact surrounding governance and institutional factors in improving financial inclusion. This paper utilizes the data on individuals’ characteristics in the Global Findex database of the World Bank across 69 developing and emerging economies to examine how different countries’ characteristics are associated with financial inclusion. Then, this paper uses data from Worldwide Governance Indicators and The Heritage Foundation to proxy for governance and institutional characteristics. We use principle component analysis, perform baseline model using probit estimations to explain measures of financial inclusion, and then augmented the model with governance and institutional variables. The result is expected to provide the answer to what degree do financial inclusion patterns vary across different countries and individual-level characteristics. In addition, the result is expected to draw conclusions on the importance of governance and institutional factors, and to what extent institutions matters in improving financial inclusion.

The causal relationship between financial development and investment in Botswana

Abstract: In this paper, we examine the causal relationship between financial development and investment in Botswana between 1976 and 2014, using the autoregressive distributed-lag (ARDL) bounds testing approach. Unlike some previous studies, our study divides financial sector development into two segments, namely bank-based and market-based financial development. We also employ a trivariate Granger-causality model in order to address the omission-of-variable bias associated with a bivariate causality model. In order to capture the breadth and depth of the financial sector in the study country, we employ both bank- and market-based financial development indices. These indices are constructed from an array of bank- and market-based financial development indicators. Our results show that there is a bidirectional Granger-causal relationship between both bank-based and market-based financial development and investment in the short run. However, in the long run, a distinct causal flow is found to prevail only from investment to bank-based financial development.

Financial Sector Development: Evidence from Institutional Reforms in Nigeria

Abstract: The paper examine the impact of institutional reforms on financial sector development in Nigeria using data that span the periods of 1996 to 2011. Our findings indicates that measures of institutional reform such as regulatory quality ( Rqty ), government effectiveness ( Gef ); and political stability and absence of voice ( Psav ) impact strongly on financial sector development ( Dcps ) in Nigeria, suggesting the need for institutional reforms that can promote viable regulatory system for the enhancement of contract enforcement; property right protection, corruption control; and to avoid any form of politically motivated violence, unconstitutional overthrownment and terrorism in Nigeria. The results of the causality test also show that financial sector development ( Dcps ) granger causes economic growth ( Rgdp ) in Nigeria. However, it is evident that future improvements in institutional quality in Nigeria, through initiation of all-encompassing reforms in the institutions, may promote financial sector development which may in turn promote economic growth.