Financial Inclusion and Financial Literacy in Low Income Group in Emerging Economy

Abstract

Purpose: Financial institutions engage in performing imperative part in the economic development of an economy through circulation of funds that resulting in employment and fair distribution of limited resources. Financial literacy results in usage of financial product and services provided by financial institutions that lead to pervasive growth of an economy. Financial inclusion takes into loop the excluded segment of a developing country to attain the desired financial and economic outcomes. Recognizing the importance of financial inclusion, this study is executed to investigate the impact of financial literacy on financial inclusion in street vendors.
 Design/methodology/approach: This study was conducted in twin cities Islamabad and Rawalpindi. Snowball and purposive sampling technique has been used in this study. Primary data has been collected from street vendors through semi structure interviews and questionnaire. Participatory action research design is used in this study. Deductive approach has been used for qualitative data analysis.
 Findings: The results of this study found that street vendors only name financial institutions. They don’t have knowledge about financial products and services provided by those financial institutions. Because of inadequate knowledge, majority of the street vendors do not use financial products and services which are available to them. A very small number of street vendors are using financial products and services. The expected outcomes of this study set a direction for policy makers of financial institutions about how to increase financial inclusion by considering the observed relations in this study.
 Practical implications: The results will help policy makers in formulating effective strategies to bring into the net that excluded segment, which if included will not only improve their quality of life but also augment to the sustainability and growth of economy through financial inclusion.
 Originality/value: As suggested by the recent relevant literature, the study is an attempt to identify those antecedents of financial inclusion, which has not been explored earlier in context of Pakistan, to extend the earlier findings through qualitative research method and to establish how financial inclusion can be made a success in achieving its desired outcomes in a developing economy.

The determinants of the financial inclusion of Indonesian female entrepreneurs

“…After employing poor Ugandans in rural areas as the samples and analyzing their data, Bongomin et al (2020) conclude that the more literate the people, the more significant their financial inclusion. Equally, Affandi and Malik (2020) and Irman et al (2021) affirm this positive association based on their investigations in Pakistan and Indonesia, respectively. Additionally, studies conducted on Indonesians, Ugandans, and South Africans by Goenadi et al (2022), Kasozi and Makina (2021), and Akande et al (2023) support this evidence.…”

“…However, their study result is still contrary. In their research, Affandi and Malik (2020), Bongomin et al (2020), Kasozi and Makina (2021), Irman et al (2021), Goenadi et al (2022), andAkande et al (2023) demonstrate a positive tendency. Conversely, Liu et al (2021) exhibit a negative propensity, and Arafat and Leon (2020) do not prove this effect.…”

“…Generally, numerous studies try to associate financial inclusion with literacy, where literacy becomes its determinant. They come from Indonesia (Arafat & Leon, 2020;Goenadi, Murhadi, & Ernawati, 2022;Irman, Budiyanto, & Suwitho, 2021), Pakistan (Affandi & Malik, 2020;Liu et al, 2021), Uganda (Bongomin, Ntayi, & Malinga, 2020;Kasozi & Makina, 2021), and South Africa (Akande, Hosu, Kabiti, Ndhleve, & Garidzirai, 2023).…”

Pengaruh Literasi Keuangan Dan Financial Technology Terhadap Inklusi Keuangan Di Desa Pengotan

“…Perekonomian global saat ini mendorong individu untuk mampu mengelola keuangan dengan hati-hati, dikarenakan dengan menerapkan pengelolaan dan manajemen keuangan dapat menghasilkan keputusan untuk menggunakan atau mendistribusikan dana yang dimiliki (Jati et al, 2021). Inklusi keuangan adalah instrumen perbankan yang memegang peranan penting dalam stabilitas sistem keuangan melalui akses dan layanan keuangan, karena inklusi keuangan memberikan aksesibilitas pada lembaganya, produknya serta layanan jasa keuanganya disesuaikan pada keperluan serta kapabiliras masyarakat maupun usahanya dalam hal ini transaksi, pembayaran, tabungan, kredit dan asuransi yang digunakan secara bertanggung jawab dan berkelanjutan dalam rangka meningkatkan kesejahteraan masyarakat (Affandi & Malik, 2020).…”