The distributional impact of access to finance on poverty: evidence from selected countries in Sub-Saharan Africa

Ndlovu, Godfrey; Toerien, Francois

doi:10.1016/j.ribaf.2020.101190

Cited by 27 publications

(19 citation statements)

References 36 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In this sense, policymakers should create encourage the expansion of financial services to all, as governments are interested in tackling poverty (Ndlovu & Toerien, 2020 ), and have the institutional capabilities to facilitate the financial inclusion process (Arun & Kamath, 2015 ; Ozili, 2018 ). Although our results suggest benefits coming from financial inclusion, the population of LATAM still presents low numbers of financial inclusion when compared to developed economies (Carballo, 2017 ).…”

Section: Discussion and Policy Implicationsmentioning

confidence: 99%

“…In 2011, the World Bank Group started the first global analysis regarding the demand for financial services. Up to this moment, a multitude of empirical studies are studying the growth of financial inclusion worldwide (Anarfo et al, 2020 ; Kabakova & Plaksenkov, 2018 ; Raichoudhury, 2020 ), its effects on issues such as poverty and inequality (Iqbal et al, 2020 ; Koomson et al, 2020 ; Mushtaq & Bruneau, 2019 ; Ndlovu & Toerien, 2020 ), and many development institutes (e.g., International Monetary Fund—IMF; African Development Bank—AfDB; Asian Development Bank—ADB; Organization for Economic Co-operation and Development—OECD) are funding the research on financial inclusion with the goal of understanding how to bank the unbanked population (Ndlovu & Toerien, 2020 ).…”

Section: Introductionmentioning

confidence: 99%

“…Thus, financial inclusion is not a meaningless part of development. Rather, it is a key tool to deal with social challenges such as poverty and inequality (Klapper et al, 2016 ; Ndlovu & Toerien, 2020 ). De facto, around 1.7 billion people are still unbanked (Ndlovu & Toerien, 2020 ), meaning they lack access to formal financial services, and 10% of the unbanked population is in Latin America countries (Carballo, 2017 ).…”

Section: Introductionmentioning

confidence: 99%

“…Rather, it is a key tool to deal with social challenges such as poverty and inequality (Klapper et al, 2016 ; Ndlovu & Toerien, 2020 ). De facto, around 1.7 billion people are still unbanked (Ndlovu & Toerien, 2020 ), meaning they lack access to formal financial services, and 10% of the unbanked population is in Latin America countries (Carballo, 2017 ). This is worrisome as financial inclusion is arguably capable of decreasing both poverty in inequality through multiple channels (e.g., granting access to savings services and to credit; facilitating personal investments on education and health) (Demirguc-Kunt et al, 2017 ; Fouejieu et al, 2020 ; Klapper et al, 2016 ), as will be further explained in Sect.…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Does Financial Inclusion Diminish Poverty and Inequality? A Panel Data Analysis for Latin American Countries

et al. 2021

View full text Add to dashboard Cite

Despite great developmental efforts in recent decades, Latin America still presents high levels of poverty and inequality when compared to developed nations. As explored widely in the literature, one potential instrument to diminish these issues is financial inclusion, including the access and usage of financial services by all people. Specifically, this paper verifies if financial inclusion and technology adoption decrease the poverty headcount ratio and the Gini index (i.e., inequality) of 13 Latin America countries (Argentina, Bolivia, Brazil, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Honduras, Panama, Paraguay, Peru, and Uruguay). To perform such analysis, an unbalanced panel dataset was built, and the Feasible Generalized Least Squares (FGLS) and the Limited Information Maximum Likelihood (LIML) techniques were employed. The results suggest that, in accordance with previous studies, financial inclusion is a powerful tool to tackle poverty and inequality. Additionally, the combined effects of financial inclusions and technology (i.e., mobile use) are also capable of decreasing the poverty and inequality levels. We discuss the policy implications of our findings and suggest a future research agenda.

show abstract

Section: Discussion and Policy Implicationsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Does Financial Inclusion Diminish Poverty and Inequality? A Panel Data Analysis for Latin American Countries

et al. 2021

View full text Add to dashboard Cite

show abstract

“…While the arguments in the theoretical literature continue, the empirical literature also documents contradictory evidence. Some studies have shown that financial development reduces poverty (Jalilian and Kirkpatrick, 2001; Dollar and Kraay, 2002; Donou-Adonsou and Sylwester, 2016) while some others have argued that financial development increased poverty (Ndlovu and Toerien, 2020). Still, another set of studies have also reported both views depending on the measures of poverty adopted (Rewilak, 2013; Rashid and Intartaglia, 2017; Rewilak, 2013).…”

Section: Introductionmentioning

confidence: 99%

Is there a nonlinear relationship between financial development and poverty in Africa?

Bolarinwa¹,

Adegboye

2021

JES

View full text Add to dashboard Cite

PurposeThe paper examines whether there is a threshold between financial development and poverty in African economies.Design/methodology/approachThe study adopts the innovative dynamic panel threshold model of Seo and Shin (2016) made practicable by Seo et al. (2019)–the model estimates threshold relationship even in the presence of endogeneity. Also, following the recommendations of Cihak et al. (2013) and Sahay et al. (2015), we also adopt a robust measure of financial development based on the four pillars of financial deepening, stability, efficiency and access derived from the principal component analysis (PCA).FindingsThe empirical results show that there exists a threshold level of financial development necessary for poverty reduction in Africa.Research limitations/implicationsOur result is important for policy formulations. First, individual African country must discover the level of financial development necessary for spurring poverty reduction. Second, policymakers, especially in lower-income countries, must keep improving their financial sector development to achieve the threshold level necessary for achieving poverty reduction even though financial development might seem less relevant at its present level.Practical implicationsThe policymakers in Africa should note that there exists a threshold level of financial development that reduces poverty. Hence, the present level of financial development might have not yielded a considerate effect on poverty. Still, the policymakers must keep pushing on until the threshold is achieved.Social implicationsFinancial development reduces poverty level but it must reach a certain threshold level before it does so. So, we advise African policymakers to continue to develop their financial sector to achieve this threshold.Originality/valueThis seems to be the first work to document the threshold relationship using the dynamic panel threshold. Besides, the study specifically concentrates on Africa dividing the continent into different income levels. Moreover, we adopt a robust measure of financial development unlike extant studies on Africa.

show abstract

The impact of financial inclusion initiatives: Evidence from meta‐analysis

Biru,

Molla,

Ferraro

et al. 2024

J of Intl Development

View full text Add to dashboard Cite

Developing an inclusive financial system is an important policy intervention to improve livelihood and reduce poverty. Despite this, the empirical evidence on the impacts of financial inclusion remains mixed. This study reports a meta‐analysis of studies on the impact of financial inclusion. The findings show that financial inclusion outcomes reflect small, positive and statistically significant average effects on consumption, income, asset and other poverty‐related indicators. The results of meta‐regression analysis also show that financial inclusion has a significant positive effect on household consumption. We discuss some of the sources of inconsistencies in financial inclusion studies, policy implications and future research directions.

show abstract

The distributional impact of access to finance on poverty: evidence from selected countries in Sub-Saharan Africa

Cited by 27 publications

References 36 publications

Does Financial Inclusion Diminish Poverty and Inequality? A Panel Data Analysis for Latin American Countries

Does Financial Inclusion Diminish Poverty and Inequality? A Panel Data Analysis for Latin American Countries

Is there a nonlinear relationship between financial development and poverty in Africa?

The impact of financial inclusion initiatives: Evidence from meta‐analysis

Contact Info

Product

Resources

About