What is it about?
This study investigates how finance contributes to socioeconomic development through an inclusive financial system and the impact of financial inclusion programs pursued by non-bank financial institutions (NBFIs) in Ghana.
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Why is it important?
Our findings reveal a statistically significant positive impact of donor-funded financial inclusion projects on targeted households’ welfare, regardless of implementing agency (donor, government or microfinance institution). The channel analysis further suggests that credit unions and savings and loan (S&L) institutions may be particularly effective conduits for delivering these welfare gains through financial inclusion programs. These findings hold valuable insights for funders seeking to maximize the welfare impact of such interventions: credit unions and S&Ls may be preferential channels for delivering financial inclusion programs aimed at improving household well-being.
Perspectives
The focus of this study is to understand if MFIs, funded by different sources, can contribute to inclusive growth and welfare. This research employs channel analysis, considering that donor and government programs are often channeled through community-based NBFIs and offer key contributions to the existing body of knowledge on financial inclusion and household welfare. This study extends the current literature by providing a deeper understanding of the role of each NBFI type in deepening financial inclusion and improving household welfare and allows policymakers, donors and governments to target inclusion efforts for maximum impact.
Dr Krishna Reddy
Toi Ohomai Institute of Technology
Read the Original
This page is a summary of: The welfare impact of financial inclusion: does the source of financing matter? A GMM and channel analysis, Journal of Accounting Literature, December 2024, Emerald,
DOI: 10.1108/jal-07-2024-0151.
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