|
on Financial Literacy and Education |
|
Issue of 2017‒09‒24
three papers chosen by |
| By: | Adele Atkinson |
| Abstract: | Micro, small and medium-sized enterprises (MSMEs) make up the majority of enterprises in the world, providing employment and contributing significantly to national incomes. Many MSMEs face a number of challenges, including regulatory hurdles and tax burdens, difficulties accessing finance and a lack of general guidance or support. Financial education can be an important tool for helping MSMEs and potential entrepreneurs to obtain access to finance and strengthen money management skills. This working paper presents the results of a stocktake of 21 economies. It shows that, while some MSMEs have access to education, training or mentoring, in most economies approaches are fragmented and risk missing important groups. Identifying MSMEs as a target group within national strategies for financial education would contribute to addressing some of the challenges they face. This would also underline the importance of measuring levels of financial literacy among MSMEs and help policy makers and stakeholders to evaluate programmes that target this group. |
| Keywords: | entrepreneur, financial consumer protection, financial education, micro-enterprise, SME |
| Date: | 2017–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:dafaad:43-en&r=fle |
| By: | De Giorgi, Giacomo; Drenik, Andres; Seira, Enrique |
| Abstract: | The ability to borrow sequentially from multiple lenders might generate sizable externalities in delinquencies. We provide evidence on the existence and "large" size of such effects. We first document that loan approval causes a persistent difference in the number of loans between initially approved and non-approved. We then show that while loan approval leads to no default for high credit score applicants, it causes a large 7pp increase in default on previously existing loans for lower score applicants. That is, a 1,000 MXN (60 USD) extra loan is associated with an increase in the probability of default of 1.5pp for the lower credit score group. This produces average losses close to 18% of total debt, an important externality on previous lenders. This shows that the financial inclusion of clients with lower credit scores is hard due to higher default, and that sequential banking may lead to high default equilibria. |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12280&r=fle |
| By: | J Paul Dunne (Southern Africa Labour and Development Research Unit, School of Economics, University of Cape Town); Elizabeth Kasekende (Bank of Uganda) |
| Abstract: | Financial services in low income countries are often not well developed, thus, individuals rely heavily on informal means of financial services to send, receive and save money, with a large number of the population unbanked. Mobile money, a type of financial innovation, enables individuals to transfer, deposit and save money using cell phone technology. It not only has the potential to improve access to financial services but could also have an effect on household consumer behaviour and improve individuals' livelihoods. This paper investigates the difference in consumption patterns between mobile money users and non-users in Uganda, one of the countries that have seen significant increases in mobile money usage, since its introduction in 2009. It is based on the Financial Inclusion Tracker Surveys (FITS) household level data that was conducted in 2012. Using ordinary least squares and seemingly unrelated regression estimation techniques, the results suggests that mobile money users are less likely to spend on food, a necessity, and more likely to spend on luxury goods, than non-users. In addition, mobile money users are more likely to receive more remittances and, as a result, they are able to spend more efficiently on particular commodities than non-users. This suggests that mobile money could indeed potentially improve individuals' livelihoods. |
| Keywords: | Mobile money, Consumption patterns |
| JEL: | D12 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ldr:wpaper:210&r=fle |