POLICIES AIMED AT ENHANCING FINANCIAL INCLUSION DURING A PANDEMIC: A LITERATURE REVIEW
DOI:
https://doi.org/10.36004/nier.es.2023.2-09Keywords:
financial inclusion, pandemic, policy innovationsAbstract
This study examines the financial inclusion policies during pandemics, particularly focusing on their efficacy within emerging economies and areas dominated by informal sectors. The urgency and relevance of the topic are underscored by the heightened economic vulnerabilities these regions face during global health crises, such as the COVID-19 pandemic, which starkly amplify the necessity for robust financial inclusion to uphold economic resilience. The primary objectives of this paper are twofold: firstly, to critically assess the array of financial inclusion policies deployed during pandemics, and secondly, to pinpoint potential policy enhancements informed by contemporary research alongside successful international implementations.
Employing a mixed-methods approach, the research synthesizes quantitative data on policy outcomes with qualitative insights from policy analyses and stakeholder interviews. This methodology allows for a nuanced understanding of the multifaceted impacts of financial inclusion initiatives and their adaptability to crisis conditions. Key findings highlight the pivotal role of digital financial services, effective public-private collaborations, and the establishment of adaptive social support mechanisms in promoting financial inclusivity amidst pandemic-induced economic disruptions. These strategies emerge as crucial levers for advancing financial inclusion, providing valuable lessons for crafting policies that are resilient, targeted, and capable of fostering sustainable economic growth and stability in the face of ongoing and future global challenges. The study's insights offer critical guidance for policymakers and financial institutions seeking to enhance financial inclusion frameworks, thereby contributing to the development of more inclusive, equitable, and resilient financial ecosystems worldwide.
Downloads
References
Abdoul-Azize, H. T., El Gamil, R. (2021). Social protection as a key tool in crisis management: learnt lessons from the COVID-19 pandemic. Global Social Welfare, 8, 107-116. https://doi.org/10.1007/s40609-020-00190-4
Aghion, P., Howitt, P., Mayer-Foulkes, D. (2005). The effect of financial development on convergence: Theory and evidence. The quarterly journal of economics, 120(1), 173-222. https://dash.harvard.edu/handle/1/4481509
Aiyar, M. S., Bergthaler, M. W., Garrido, J. M., Ilyina, M. A., Jobst, A., Kang, K., Kovtun, D., Liu Y., Monaghan, D., Moretti, M. (2015). A strategy for resolving Europe's problem loans: International Monetary Fund. https://www.imf.org/external/pubs/ft/sdn/2015/sdn1519.pdf
Aristei, D., Gallo, M. (2024). Green management, access to credit, and firms’ vulnerability to the COVID-19 crisis. Small Business Economics, 62(1), 179-211. https://doi.org/10.1007/s11187-023-00759-1
Beck, T., Demirgüç-Kunt, A., Levine, R. (2007). Finance, inequality and the poor. Journal of economic growth, 12, 27-49. https://doi.org/10.1007/s10887-007-9010-6
Borio, C. E., Disyatat, P., Juselius, M., Rungcharoenkitkul, P. (2018). Monetary policy in the grip of a pincer movement. BISS Working Papers No 706. https://www.bde.es/f/webpi/SES/seminars/2019/Fich/sie20191125.pdf
Borio, C., Gambacorta, L., Hofmann, B. (2017). The influence of monetary policy on bank profitability. International Finance, 20(1), 48-63. https://doi.org/10.1111/infi.12104
Carlsson, H., Larsson, S., Svensson, L., Åström, F. (2017). Consumer credit behavior in the digital context: A bibliometric analysis and literature review. Journal of financial counseling and planning, 28(1), 76-94. https://doi.org/10.1891/1052-3073.28.1.76
Çevik, Ü., & Mutlu, B. Y. (2022). Liquidity Steps: Policy Actions Taken by Central Banks during Coronavirus Pandemic. In: Pandemnomics: The Pandemic's Lasting Economic Effects (pp. 205-220) Springer. https://link.springer.com/chapter/10.1007/978-981-16-8024-3_10
Demirgüç-Kunt, A., Asli, Klapper, L., Singer, D., Ansar, S. (2018). The Global Findex Database 2017: Measuring financial inclusion and the fintech revolution. https://documents.worldbank.org/en/publication/documents-reports/documentdetail/332881525873182837/the-global-findex-database-2017-measuring-financial-inclusion-and-the-fintech-revolution
Dev, S. M. (2020). Income support through cash transfers and employment guarantee schemes during the pandemic times in India. The Indian Journal of Labour Economics, 63(Suppl 1), 133-138. https://doi.org/10.1007/s41027-020-00268-9
Eichhorst, W., Marx, P., & Rinne, U. (2020). Manoeuvring through the crisis: Labour market and social policies during the COVID-19 pandemic. Intereconomics, 55(6), 375-380. https://www.intereconomics.eu/contents/year/2020/number/6/article/manoeuvring-through-the-crisis-labour-market-and-social-policies-during-the-covid-19-pandemic.html
Ervo, L. (2022). Insolvency Law and Covid-19: The Finnish Example on Tackling the Pandemic. In: Finance, Law, and the Crisis of COVID-19: An Interdisciplinary Perspective. [ed] Mansour N., Bujosa Vadell Lorenzo M. (pp. 123-138): Springer. https://doi.org/10.1007/978-3-030-89416-0
Ferrero, G., Pisani, M., Tasso, M. (2021). Policy mix during a pandemic crisis: a review of the debate on monetary and fiscal responses and the legacy for the future. Questioni di Economia e Finanza (Occasional Papers) 623, Bank of Italy, Economic Research and International Relations Area. https://ideas.repec.org/p/bdi/opques/qef_623_21.html
Gentilini, U. (2022). Cash Transfers in Pandemic Times. Evidence, Practices, and Implications from the Largest Scale Up in History. Washington, DC: World Bank. https://documents1.worldbank.org/curated/en/099800007112236655/pdf/P17658505ca3820930a254018e229a30bf8.pdf
Gentilini, U., Almenfi, M., Orton, I., Dale, P. (2020). Social protection and jobs responses to COVID-19. A Real-Time Review of Country Measures. World Bank, Washington, DC. https://www.ugogentilini.net/wp-content/uploads/2020/12/Global-SP-COVID19-responses_Dec11.pdf
Higgins, J. P., Green, S. (2011). Cochrane handbook for systematic reviews of interventions. The Cochrane Collaboration. London, UK. https://handbook-5-1.cochrane.org/
Jung, W. (2020). Two models of community-centered development in Myanmar. World Development, 136, 105081. https://doi.org/10.1016/j.worlddev.2020.105081
Kabengele, C., Hahn, R. (2021). Institutional and firm-level factors for mobile money adoption in emerging markets - A configurational analysis. Technological Forecasting and Social Change, 171, 120934. https://doi.org/10.1016/j.techfore.2021.120934
Katz, R. L., Callorda, F. M., Jung, J. (2020). Can digitization mitigate COVID-19 damages? Evidence from developing countries. Available at SSRN: https://ssrn.com/abstract=3600829 or http://dx.doi.org/10.2139/ssrn.3600829
Kumar, S. L., Calvo-Friedman, A., Freeman, A. L., Fazio, D., Johnson, A. K., Seiferth, F., Clapp, J., Davis, N. J., Schretzman, M., Springer, B., Harmony N. A., Kaplan, Sue A., Berry, C. A. Doran. K. M. Springer, B. (2023). An Unconditional Cash Transfer Program for Low-Income New Yorkers Affected by COVID-19. Journal of Urban Health, 100(1), 16-28. https://doi.org/10.1007/s11524-022-00693-9
Leong, E. (2022). Regulating Borrower Hardship in Australia, Singapore, and Hong Kong: Payment Holidays During COVID-19 and Beyond. Journal of Consumer Policy, 45(3), 411-433. https://doi.org/10.1007/s10603-022-09515-6
Liu, Y., Zhang, Y., Fang, H., Chen, X. (2022). SMEs’ line of credit under the COVID-19: evidence from China. Small Business Economics 58, 807-828. https://doi.org/10.1007/s11187-021-00474-9
Mansour, H. (2022). How successful countries are in promoting digital transactions during COVID-19. Journal of Economic Studies, 49(3), 435-452. https://doi.org/10.1108/JES-10-2020-0489
Mazenda, A., Masiya, T., Mandiyanike, D. (2022). The Effectiveness of the COVID-19 Economic and Social Relief Package as a Poverty Alleviation Strategy in South Africa. In: Faghih, N., Forouharfar, A. (eds) Socioeconomic Dynamics of the COVID-19 Crisis. Contributions to Economics. Springer, Cham. pp. 215-230. https://doi.org/10.1007/978-3-030-89996-7_10
Moher, D., Liberati, A., Tetzlaff, J., Altman, D. G., PRISMA Group (2009). Preferred reporting items for systematic reviews and meta-analyses: the PRISMA statement. Plos medicine, 6(7). https://doi.org/10.1371/journal.pmed.1000097
Mosser, P. C. (2020). Central bank responses to COVID-19. Business Economics, 55, 191-201. Business Economics (2020) 55:191–201 https://doi.org/10.1057/s11369-020-00189-x
Nicola, M., Alsafi, Z., Sohrabi, C., Kerwan, A., Al-Jabir, A., Iosifidis, C., Aghae, M., Agha, R. (2020). The socio-economic implications of the coronavirus pandemic (COVID-19): A review. International journal of surgery, 78, 185-193. https://doi.org/10.1016/j.ijsu.2020.04.018
Petticrew, M., Roberts, H. (2006). Systematic reviews in the social sciences: A practical guide. https://doi.org/10.1002/9780470754887
Pindyck, R. S. (2020). COVID-19 and the welfare effects of reducing contagion. NBER Working Paper No. 27121. Retrieved from: http://www.nber.org/papers/w27121
Prates, I., Barbosa, R. J. (2020). The impact of COVID-19 in Brazil: labour market and social protection responses. The Indian Journal of Labour Economics, 63, (Suppl 1), 31-35. https://doi.org/10.1007/s41027-020-00252-3
Preziuso, M., Koefer, F., Ehrenhard, M. (2023). Open banking and inclusive finance in the European Union: perspectives from the Dutch stakeholder ecosystem. Financial Innovation, 9(1), 111. https://doi.org/10.1186/s40854-023-00522-1
Pu, G., Qamruzzaman, M., Mehta, A. M., Naqvi, F. N., Karim, S. (2021). Innovative finance, technological adaptation and SMEs sustainability: the mediating role of government support during COVID-19 pandemic. Sustainability, 13(16), 9218. https://doi.org/10.3390/su13169218
Rabbani, M. R., Bashar, A., Nawaz, N., Karim, S., Ali, M. A. M., Rahiman, H. U., Alam, M. S. (2021). Exploring the role of Islamic fintech in combating the aftershocks of covid-19: The open social innovation of the Islamic financial system. Journal of Open Innovation: Technology, Market, and Complexity, 7(2), 136. https://doi.org/10.3390/joitmc7020136
Ramakrishnan, D. (2012). Financial Literacy and Financial Inclusion. 13th Thinkers and Writers Forum, June 2012, Available at SSRN: https://ssrn.com/abstract=2204173
Ruggeri, K. (Ed.). (2018). Behavioral Insights for Public Policy: Concepts and Cases (1st ed.). Routledge. https://doi.org/10.4324/9781351052542
Sha’ban, M., Girardone, C., Sarkisyan, A. (2021). Cross-country variation in financial inclusion: a global perspective. The European Journal of Finance 26(4-5), 319-340. https://doi.org/10.1080/1351847X.2019.1686709
Tay, L.-Y., Tai, H.-T., & Tan, G.-S. (2022). Digital financial inclusion: A gateway to sustainable development. Heliyon 8, e09766. https://doi.org/10.1016/j.heliyon.2022.e09766
Thaler, R. H., Sunstein, C. R. (2009). Nudge: Improving decisions about health, wealth, and happiness. Available at https://issc.al.uw.edu.pl/wp-content/uploads/sites/2/2022/05/Nudge-Improving-Decisions-About-Health-Wealth-and-Happiness-by-Richard-H.-Thaler-Cass-R.-Sunstein.pdf
Tsvirko, S. (2021). Coronavirus Pandemic as a Challenge in Debt Sphere. In: Antipova, T. (eds) Advances in Digital Science. ICADS 2021. Advances in Intelligent Systems and Computing, vol 1352. Springer, Cham. https://doi.org/10.1007/978-3-030-71782-7_9
World Bank. (2020). Global Economic Prospects, June 2020. Retrieved from Washington, D.C. https://doi.org/10.1596/978-1-4648-1553-9
World Bank. (2022). COVID-19 Boosted the Adoption of Digital Financial Services. 2022. Available at The World Bank https://www.worldbank.org/en/news/feature/2022/07/21/covid-19-boosted-the-adoption-of-digital-financial-services
