Purpose
The financially excluded are often denied basic financial services from mainstream banking institutions, leading them to high-cost fringe finance institutions (FFIs) such as payday loan companies and pawnshops. While strategies to address financial exclusion often include financial capabilities education, there does not appear to be evidence suggesting such education is an appropriate solution. The purpose of this study is to explore the relationship between financial capability and financial exclusion with survey data collected from the Canadian city of Kamloops located in the southern interior of British Columbia.
Design/methodology/approach
This exploratory research addresses the objective with survey data collected on the banking habits and financial capability levels of fringe finance users in a Canadian city.
Findings
The results imply that fringe finance users do not have lower levels of financial capability than those who do not use fringe finance, when education and income are controlled.
Research limitations/implications
Limitations include the relatively small survey sample of 105 people in one urban center in Canada.
Originality/value
While financial literacy is acknowledged to be an important life skill for all members of society, there is no conclusive evidence suggesting it is a solution to financial exclusion. This is the first research to examine the relationship between financial exclusion and fringe finance use in Canada by collecting data on fringe finance users with face-to-face interviews.
The effectiveness of tax incentives on charitable donation expenditures in Canada is explored, and the analysis is extended to compare the effectiveness across different donation sectors. Price elasticities are estimated with data from the 2007 Canada Survey of Giving, Volunteering and Participating. Results suggest that specific charitable sectors are affected differently by Canada’s tax credit system. The findings have implications for public policy.
Employment income of Aboriginal Canadians is analysed with the objective of assessing the impact of a broader definition of capital to include the human capital component of health status and social capital on income level. The dataset of the 2006 Aboriginal Peoples Survey is examined using an IV ordered probit model to analyse the factors affecting employment income. The results suggest that social capital and human capital, measured by education and health status, among other socio‐demographic factors, influence the level of employment income among Aboriginal Canadians. The findings have implications for public policy.
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