Inclusive Finance for Fragile and Post-Conflict States in Africa
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- 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.
- 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).
- ItemSustainable Financial Inclusion for Women owned Firms in Eswatini(African Economic Research Consortium, 2022) Ajetomob, J. O; Dlamini, S. G.; Dlamini, D. VLiterature has argued for the role of women in a nation’s economic especially the household welfare. While acknowledge this claim, there is evidence that not much research has been carried out in Eswatini to understand the link between gender and financial inclusion, and how this impacts on economic growth in Eswatini. In view of this and the evidence of a growing population of women in Eswatini especially due to the impact of HIV/AIDS, this study investigates financial inclusion from a gender dimension in Eswatini. In recognition of the importance of women in sustainable economic growth it is essential that Government and financial institutions capacitate and mentor female-owned firms, adjust tax and collateral requirements for access to credit.
- 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.
- 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 Exclusion in Central African Republic(2022) Mokobongo, France Jésus Jackson Yoko; Mballa, Nerry Urbain Cyrille; Koyongozo, Alain Douath; Dacko, Georgette; Gonessa, Michael EmmanuelAccess to and use of financial services is critical to ensure the economic and social integration of citizens in today's society. It is also a necessity for employment, economic growth, poverty reduction and social inclusion. This recognition explains the interest given by governments and international institutions to the issue of financial inclusion as the cornerstone of economic and social development and well-being. The goal of financial inclusion is to expand access to affordable banking and financial products and services for populations excluded from the traditional banking circuit (Osei-Assibey, 2009, Kabakova and Plaksenkov 2018 and Demircguc-Kunt et al. 2018)
- 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.
- ItemImproved Welfare for Women and Youths in Gambia Through Access to Finance(2022) Manja, Laston P.; Badjie, Isatou A.Access to finance, and more broadly financial inclusion, is one of the key challenges faced by households in the Gambia, in the face of an underdeveloped financial sector. Financial services in the Gambia are both formal and informal. Yet access to both formal and informal finance is very low in The Gambia with only 31 percent of individuals being financially included; 19 percent of which have access to formal finance and 12 percent to informal finance. In addition, there is a challenge of marginalization in terms of access to the various forms of finance across various works of life. This divide is even more pronounced by gender and age as women and youths have been observed to make less resort to the formal sources than to the informal sources, which tend to attract high rates of interest. Particularly, only 15 percent of women accessed formal finance compared to 23 percent for men. Yet, women are more informally included than men. By age, youths are more financially excluded than seniors with only 14 percent formally included and 9 percent informally included. To reduce the low participation rate of women and youths in finance will encompass setting evidence based policies that promote easy access to finance in order to achieve the 2nd priority of 2018-2021 now extended to 2022 National Development Plan (NDP) of the country.
- ItemImproving Women’s Welfare in Burundi through Inclusive Finance(African Economic Research Consortium, 2022-10) Atta-Aidoo J; Matthew, Ester Cosmas; Bizoza, Saidi; Saleh, Abdulkarim OnahThree out of every five women reported having access to a mobile money account comparedto a little over one in every fivewomen having access to eithermicrofinance or bank account. This revealed that a mobile money account is the most preferred form of financial inclusion among women in Burundi. Contrary to existing literature, microfinance account ownership which has been heralded as a panacea to poverty reduction among women was unpopular among Burundian women. Improved financial inclusion significantly enhances the accumulation of household assets by women which goes a long way to improve their welfare. Specifically, mobile money account ownership exerted a greater impact on the welfare of women than bank account ownership, while ownership of microfinance account had no effect on women’s welfare. Additionally, the effect of improved financial inclusion on the welfare of women was more pronounced in urban areas compared to rural areas. This reveals a locational disparity in effect among women in Burundi.