Although theory suggests that financial market imperfections-mainly information asymmetries, market segmentation and transaction costs-prevent poor people from escaping poverty by limiting their access to formal financial services, new financial technologies (FinTech) are seen as key enablers of financial inclusion. Indeed, the UN 2030 Agenda for Sustainable Development (UN-2030-ASD) and the G20 High-Level Principles for Digital Financial Inclusion (G20-HLP-DFI) highlight the importance of harnessing the potential of FinTech to reduce financial exclusion and income inequality. This paper investigates the interrelationship between FinTech, financial inclusion and income inequality for a panel of 140 countries using the Global Findex waves of survey data for 2011, 2014 and 2017. We posit that FinTech affects inequality directly and indirectly through financial inclusion. We invoke quantile regression analysis to investigate whether such effects differ across countries with different levels of income inequality. We uncover new evidence that financial inclusion is a key channel through which FinTech reduces income inequality. We also find that while financial inclusion significantly reduces inequality at all quantiles of the inequality distribution, these effects are primarily associated with higher-income countries. Overall, our results support the aspirations of the UN-2030-ASD and G20-HLP-DFI. Highlights • Harnessing the potential of FinTech to reduce financial exclusion and income inequality has been proposed by the UN and G20. • We posit that FinTech affects income inequality directly and indirectly through financial inclusion. • We invoke quantile regression analysis to investigate whether the effects of FinTech differ across countries with different levels of income inequality. • We find that financial inclusion is a key channel through which FinTech reduces income inequality, at all quantile levels, primarily among higher-income countries.
This paper examines the impact of financial inclusion on the mental health of heads of household in Nigeria. The study employed data from the 2015/2016 Nigerian General Household Survey (GHS), matched with georeferenced data concerning financial services obtained from the Insight2Impact (i2i) GIS interface. The results indicate that financial inclusion has a strong positive impact on mental health. The study used a robust instrumental variable method, in which a household's distance from the nearest financial institution was used as the instrument for financial inclusion. In addition, it identified the potential channels through which financial inclusion can influence mental health, including: (1) food expenditure; (2) remittances; and (3) risk-coping mechanisms. The findings of this study reinforce growing evidence for the benefits of financial inclusion for alleviating depression symptoms.
This paper examines the relationship between financial structure and economic development for Germany, the USA, France and Turkey between 1989 and 2012. Nonlinear Autoregressive Distributed Lags (NARDL) is employed to investigate whether a dynamic change exists in the financial structure of these countries in response to a change in their stage of economic developmentas suggested by the view of 'new structuralism'. Partly in line with the previous literature, which classified the financial systems of Germany as bank-based, the USA as marketbased and France and Turkey as in an intermediate position between these two profiles, the findings presented in this work also give credence to'new structuralism' theory on the linkages between financial structure and the stage of development for these four economies JEL Classification G10, G21
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