Financial Access Expansion and Ruralurban Welfare Disparities: Evidence from Zambia
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Date
2020-11-15
Authors
Nanziri, Lwanga Elizabeth
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research consortium
Abstract
This paper investigates the welfare gains following changes in aggregate financial
access. Using individual-level data collected in Zambia between 2009 and 2015,
results show that increasing the number of financial access points improved the
quality of life by moving users of financial services by 1.2 percentage points,
especially in rural areas. A monetary measure of welfare shows an overall
increase in incomes by ten percentage points over the seven-year period for
urban dwellers, moving the urban poor above the income-poverty line in
Zambia. Financial resources, exchanged through financial services providers
located closer to users, were used to acquire and/or improve the quality of homes including the use of better cooking technologies. This choice of investment
in dwellings, points to a long-term outlook in the financial decisions taken by the
financially included, with prospects for sustainable development. These results
highlight the need to intensify financial expansion policies that target the rural areas
in the fight against poverty.