article · Cogent Economics & Finance
An analysis of Ethiopian data from the World Bank Global Findex reveals that educational attainment, wealth, age, and male gender correspond with higher levels of financial inclusion, with income and education acting as the strongest drivers. Disparities affecting women stem largely from their broader exclusion from non-financial economic sectors. Furthermore, distinct demographics encounter different obstacles to accessing services. Young and low-income individuals face involuntary barriers such as distance to access points, service costs, and missing documentation. Conversely, older and wealthier groups cite voluntary factors, including reliance on family members who already possess accounts. While women show lower rates of saving for business or old age, wealthier educated individuals actively save for retirement. Both lower- and higher-income citizens primarily pursue formal loans for business activities and asset acquisition. Fostering equity requires interventions that directly target underserved demographics.
Millions of individuals remain outside the formal banking system, restricting economic mobility and community resilience. By identifying the exact social and institutional reasons why women, rural residents, and poorer citizens cannot open accounts or obtain loans, governments and lenders can design tailored interventions. Understanding these barriers helps focus poverty alleviation efforts where they are most urgently needed.
This empirical research points to commercial opportunities for commercial banks, microfinance institutions, and telecommunications firms seeking to deploy mobile banking and mobile money solutions. The findings highlight immediate market demand for low-cost, digital onboarding models that eliminate physical travel and heavy documentation. Because the work evaluates survey data to recommend technology adoption rather than testing a specific platform, it represents early-stage strategic evidence for product design and market expansion.
AI-generated from the published abstract. Always read the original work before citing.
The main objective of this paper is to examine the drivers, barriers of financial inclusion, and saving and credit behaviour in Ethiopia. We used the World Bank 2017 Findex database to carry out logit estimations. We found that being educated, richer, a man, and older associated with greater level of financial inclusion with a strong influence of income and education. We found that the existing gender gaps in the financial inclusion is mainly due to women exclusion from the non-financial sector. While younger and poor adults do not access formal accounts due to involuntary exclusion (distance to the nearest financial access point, affordability, and lack of documentation), older and richer individuals are constrained by voluntary barriers (lack of money, family member has account). Women are less likely to save for farm or business and old age security purposes, while educated individuals in the wealthiest 20% quintile save for old age security purposes. The rich and the poor seek formal credit primarily for farm/business and asset purchase. Our work confirms that the determinants, barriers, saving, and credit behaviour are different across individual characteristics. We strongly recommend that policies that aim to foster financial inclusion should target the vulnerable (the poor, young, less educated, and women) population groups. Authorities and policymakers should strive to improve women participation in the formal real sector of the economy, financial institutions should adopt technologies such as mobile banking and mobile money to ensure the accessibility of financial services.
This page summarises published work. The authoritative version sits with the publisher.
DOI: 10.1080/23322039.2022.2071385
Is something wrong with this record? Report it or request removal.
Discussion
Have you built on this work, tried to replicate it, or seen it applied in practice? Share what you know. Verified researchers and MARATTO™ domain experts can open a discussion, and any member can reply. Contributions are reviewed before they appear.
No discussion yet. Open the first thread.
New to MARATTO™? Create a free account.
