Inclusive Finance for Fragile and Post-Conflict States in Africa
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- ItemGender Perspective in Building Resilience Through Financial Inclusion(African Economic Research Consortium, 2022) Mesfin, Hiwot; Ahmed, Musa HasenThe effects of climate shocks on welfare and households’ coping mechanisms has been extensively addressed in the literature. However, there is a dearth of evidence on how climate shocks impacts on fragile societies especially in Africa. Due to this knowledge gap, in this study, we examine an African context, specifically Somalia in a postconflict era,to understand householdwelfare through the lens ofthe interactions between climate shock and financial inclusion. Our results show that female-headed households are more likely to fall below the poverty line, have a larger poverty depth, and shift their diet due to climate shock than male-headed households. Interestingly, we find thatremittances decrease following climate shock,bothonaverageandforfemale-headedhouseholds, but suchreductiondoesnothaveasignificantadverseeffectonthehouseholds' coping ability. Additionally, we find that mobile money improves households’ coping ability. Policymakers need to consider: 1)the gender variations in climate vulnerability when designing interventions; 2) further investigating the reasons behind the reduction in remittances following shocks; and 3) expanding mobile money infrastructure to reap its benefits of improving coping abilities of the vulnerable.
- ItemFinancial Inclusion for Sustainable Innovation and Performance of Enterprises in Sierra Leone(African Economic Research Consortium, 2022) Djossou, Gbetoton Nadege; Sandy, James Fomba; Novignon, JacobAccording to the World Bank’s Global Findex data1 , only 20 percent, 25 percent, and 15 percent of Sierra Leone’s total population aged above 15 years, male population and female population own a bank account in 2017, respectively. This is well below the average of 42.6% for SSA (WB, 2020) and implies that a significant proportion of the population, and women in particular, are financially excluded. Furthermore, mobile money penetration rate is low in the country. Only 11 percent ofthe population aged more than 15 years own a mobile money account. Also, only 14 percent of male population and 9 percent of female population own mobile money account (WB, 2020). The lowfinancial inclusion pattern is also reflected amongMSMEs in the country. The World Bank Enterprises Survey data collected in 2017 for Sierra Leone suggest that of the 150 firms surveyed, only 48 (32%) use mobile money for their transactions. Also, the majority of these firms only used the mobile money services to receive payment from customers. This situation has compelled the government to roll out relevant interventions to promote financial inclusion in recent years. These include the adoption of a national strategy for financial inclusion (2017-2020) and the provision of support for FinTech innovation. The national strategy has a broad vision “to make financial services available, accessible and affordable to all Sierra Leoneans and enterprises, and support inclusive and resilient private-sector-led growth (BoSL, 2016).
- ItemTargeted Household Credit Reduces School Dropout for Girls in Fragile States(African Economic Research Consortium, 2022) Nanziri, Lwanga Elizabeth; Mwale, Martin; Kamninga, Tony MwendaUp to 263 million children and youths are out of school. Despite the implementation of universal primary education policies that have seen net attendance reach 87% in 2019, and school completion of four out of five children according to UNICEF, girls account for 49% of school dropouts globally, with 26.4% and 73.6% in the primary and secondary school categories respectively.1 The World Bank argues that “limited educational opportunities for girls, and barriers to completing 12 years of education, cost countries between US$15 trillion and $30 trillion in lost lifetime productivity and earnings.”2 Women and children suffer the most in fragile states. This suffering includes sexual violence and poor access to medical care, and disruption to education, which translates into limited job opportunities. Girls often end up as child brides, while boys end up as child soldiers. For instance, in Mozambique, where up to 800 000 people have been displaced due to civil wars and weather related disasters like floods, female school dropouts has been as high as 94% 11% and 1% for primary, secondary and university education respectively. Relatedly, child brides have been at a record high of 50% of girls, while youth unemployment reached a high of 34% in 2015. All these factors combined can push households, communities, and countries below the poverty- line. Access to finance has proven to be a credible pathway to reducing poverty and inequality. For instance, access to credit enables households to consume today against future incomes, invest in businesses whose returns can be used to increase consumption of services such as health care or education for children, while insurance financial products and platforms provide a form of mitigation and resilience strategies.
- ItemBoosting Agricultural Productivity in Mali Through Financial Inclusion and Gender Equality(African Economic Research Consortium, 2022) Fowowe, BabajideMali is a prominent fragile and post-conflict country (FPCC) in SSA. Since independence in 1960, the country has experienced four armed rebellions, accounting for a total of 20 years. Agriculture is the mainstay of the Malian economy, and accounts for about 40% of GDP, and 75% of total employment. However, women are severely disadvantaged in Mali. Women have lower participation in education and government, and receive lower income compared to men. Also, women have lower outcomes in agricultural productivity and financial inclusion. Financial inclusion has been rising, with mobile money accounting for the substantial proportion of the increases. Mali’s economic performance has been low, with slow rates of economic growth and high poverty levels. Improvements in agricultural productivity will be important for attaining sustainable development. Financial inclusion and gender equality have the potential to be critical drivers of such improvements in agricultural productivity. It is important to conduct empirical investigations to see if agricultural productivity can be enhanced through financial inclusion and agricultural productivity.
- ItemGender and Household Welfare Through Financial Inclusion in Liberia(African Economic Research Consortium, 2022) Mulbah, Francis F.B.; Mantey, Vida; Olumeh, Dennis Etemesi; Okemer, Ipara BillyFinancial inclusion (FI) is critical to achieving the Sustainable Development Goals (SDGs), particularly no poverty, gender equality, and reduced inequalities (GSMA, 2021). However, there is limited evidence of its impacts on household welfare in fragile andpost-conflict countries (FPCCCs). FPCCCs suchas Liberia,have anunderdeveloped financial sector and limited financial inclusion resulting in very lowaccess to financial services in the country (Sile, 2013). Although there are efforts to improve financial inclusion in Liberia, there is evidence that suggests the persistent gender gap in terms of access to financial services. Forinstance, only 12% of Liberian women have a bank account, compared to 21% of men and only 24.4% of women use their mobile phones for financial transactions, compared to 30 percent of men (LISGIS, 2020) While determinants and impacts of FI in SSA have received significant attention in the literature, the role of financial inclusion on household welfare in FPCCs remains largely neglected. Also, information on how gender affects FI and its effectiveness on household welfare is scarce. In this study, we cross-examine the role of gender in improving household welfare in Liberia through financial inclusion. Access to formal financial services improves financial inclusion. Existing literature has shown that countries with strong financial systems have relatively good financial inclusion. However, this is different from FPCCs which have weak institutional frameworks and poor infrastructure. Therefore, this cannot be replicated in FPCCS like Liberia which has limited financial capabilities and financial literacy.