scholarly journals Challenges Facing Financial Inclusion Due to the COVID-19 Pandemic

2020 ◽  
Vol 3 (2) ◽  
pp. 50
Author(s):  
Tea Kasradze
Keyword(s):  
Low Income ◽  
Small And Medium Enterprises ◽  
Financial Inclusion ◽  
Financial Resources ◽  
Financial Products ◽  
The Poor ◽  
Wide Range ◽  
Medium Enterprises ◽  
The Impact ◽  
Poor Population

Financial inclusion is often considered as an access to financial resources for the wide public and small and medium-sized businesses, although it is a much broader concept and includes a wide range of access to quality financial products and services, including loans, deposit services, insurance, pensions and payment systems. Mechanisms for protecting the rights of consumers of financial products and services are also considered to be subject to financial inclusion. Financial inclusion acquires great importance during the pandemic and post-pandemic period. The economic crisis caused by the pandemic is particularly painful for low-income vulnerable population. A large part of the poor population who were working informally has lost source of income due to lockdown from the pandemic. Remittances have also been reduced / minimized, as the remitters had also lost jobs and are unable to send money home. Today, when people die from Coronavirus disease, it may be awkward to talk about the financial side of a pandemic, but the financial consequences can be far-reaching if steps are not taken today to ensure access to and inclusion of financial resources. The paper examines the impact of the pandemic on financial inclusion and the responses of the governments and the financial sectors to the challenge of ensuring the financial inclusion of the poor population and small and medium enterprises.

scholarly journals The impact of innovation support programs on small and medium enterprises innovation in traditional manufacturing industries: An evaluation for seven European Union regions

2016 ◽  
Vol 34 (8) ◽  
pp. 1425-1452 ◽  
Author(s):  
Dragana Radicic ◽  
Geoffrey Pugh ◽  
Hugo Hollanders ◽  
René Wintjes ◽  
Jon Fairburn
Keyword(s):  
European Union ◽  
Manufacturing Industry ◽  
Small And Medium Enterprises ◽  
Public Investment ◽  
Support Programs ◽  
Wide Range ◽  
Traditional Manufacturing ◽  
Medium Enterprises ◽  
The Impact ◽  
Innovation Support

We evaluate the effect of innovation support programs on output innovation by small and medium enterprises in traditional manufacturing industry. This focus is motivated by a definition of traditional manufacturing industry that includes capacity for innovation, and by evidence of its continued importance in European Union employment. We conducted a survey in seven European Union regions to generate the data needed to estimate pre-published switching models by means of the copula approach, from which we derived treatment effects on a wide range of innovation outputs. We find that for participants the estimated effects of innovation support programs are positive, typically increasing the probability of innovation and of its commercial success by around 15%. Yet, we also find that a greater return on public investment could have been secured by supporting firms chosen at random from the population of innovating traditional sector small and medium enterprises. These findings indicate the effectiveness of innovation support programs while suggesting reform of their selection procedures.

scholarly journals Financial Inclusion and Financial Literacy in Low Income Group in Emerging Economy

2020 ◽  
Vol 6 (4) ◽  
pp. 1001-1008
Author(s):  
Hina Affandi ◽  
Qaisar Ali Malik
Keyword(s):  
Financial Institutions ◽  
Low Income ◽  
Financial Literacy ◽  
Relevant Literature ◽  
Financial Inclusion ◽  
Primary Data ◽  
Street Vendors ◽  
Policy Makers ◽  
Financial Products ◽  
The Impact

Purpose: Financial institutions engage in performing imperative part in the economic development of an economy through circulation of funds that resulting in employment and fair distribution of limited resources. Financial literacy results in usage of financial product and services provided by financial institutions that lead to pervasive growth of an economy. Financial inclusion takes into loop the excluded segment of a developing country to attain the desired financial and economic outcomes. Recognizing the importance of financial inclusion, this study is executed to investigate the impact of financial literacy on financial inclusion in street vendors. Design/methodology/approach: This study was conducted in twin cities Islamabad and Rawalpindi. Snowball and purposive sampling technique has been used in this study. Primary data has been collected from street vendors through semi structure interviews and questionnaire. Participatory action research design is used in this study. Deductive approach has been used for qualitative data analysis. Findings: The results of this study found that street vendors only name financial institutions. They don’t have knowledge about financial products and services provided by those financial institutions. Because of inadequate knowledge, majority of the street vendors do not use financial products and services which are available to them. A very small number of street vendors are using financial products and services. The expected outcomes of this study set a direction for policy makers of financial institutions about how to increase financial inclusion by considering the observed relations in this study. Practical implications: The results will help policy makers in formulating effective strategies to bring into the net that excluded segment, which if included will not only improve their quality of life but also augment to the sustainability and growth of economy through financial inclusion. Originality/value: As suggested by the recent relevant literature, the study is an attempt to identify those antecedents of financial inclusion, which has not been explored earlier in context of Pakistan, to extend the earlier findings through qualitative research method and to establish how financial inclusion can be made a success in achieving its desired outcomes in a developing economy.

scholarly journals Parametric Conditions of High Financial Risk in the SME Sector

Risks ◽  
2019 ◽  
Vol 7 (3) ◽  
pp. 84 ◽  
Author(s):  
Ślusarczyk ◽  
Grondys
Keyword(s):  
Low Income ◽  
Financial Risk ◽  
Small And Medium Enterprises ◽  
Small Enterprises ◽  
Continuous Variables ◽  
National Economic ◽  
Credit Financing ◽  
High Level ◽  
Medium Enterprises ◽  
The Impact

The sector of SME is the major force for the national economic and social development. Financial risk is one of the key threats to the activity of small and medium enterprises. The most common manifestation of the financial risk of SMEs is difficulty in financing the business and lack of funds for development. Banks are unwilling to grant loans to such companies. Moreover, it is the rising operating costs that cause shrinking profits, which may result in corporate debt, difficulty in debt repayment, and consequently, high financial risk of these entities. Numerous differences in conducting the activity of small and large enterprises intensify this risk and mean that the model of credit financing for companies is not adjusted to the capabilities and principles of the operation of small enterprises. Therefore, risk management is one of the most important internal processes in small and medium enterprises. The identification of factors that affect the level of financial risk in these entities is therefore crucial. The main objective of this research was to analyze the impact of selected parametric characteristics of the SME sector on the intensity of financial risk they take. This objective was accomplished on the basis of the survey with the participation of Polish SMEs. In order to test the adopted research assumptions, the linear regression model was used with four continuous variables for each type of the identified financial risk. Based on the final research results, the logit model was obtained for the risk of insufficient profits. It was indicated that both the internationalization of the company and the ability to manage risk are the only factors that affect a high level of risk of low income. The article ends with the discussion and the comparison with some previous research in this area.

scholarly journals THE IMPACT ASSESMENT OF THE MICRO FINANCE TO FINANCIAL INCLUSION AND BISUNESS GROWTH: A STUDY OF THE MICRO, SMALL AND MEDIUM ENTERPRISES IN IGEMBE SOUTH (KENYA)

2018 ◽  
Vol 3 (1) ◽  
pp. 1
Author(s):  
Martin Guantai Kanake ◽  
Dr. R. Mahesh
Keyword(s):  
Small Businesses ◽  
Default Risk ◽  
Small And Medium Enterprises ◽  
Distribution Channel ◽  
Financial Inclusion ◽  
Microfinance Institutions ◽  
Development Fund ◽  
The Government ◽  
Medium Enterprises ◽  
The Impact

Purpose: The purpose of this study was to assess the impact of microfinance on financial inclusion and business growth in Igembe South District Kenya.Methodology: Descriptive research was used in discovering the research objectives. The research targeted the micro, small and medium sized businesses operating in Maua town (Igembe south District), 2181 of which were registered and licensed. A sample of 280 businesses (12.84% of the population) participated in the study.Results: This study revealed that microfinance institutions played a major role in improving financial inclusion among the small business owners who previous research has shown that they have been traditionally excluded from the formal banking systems. 78% of the respondents had access to the micro finance services while 60% had active microcredit in the preceding 12 months. It was clear that the microfinance institutions were cultivating the culture of saving among the micro entrepreneurs. However, most of the new businesses specifically those less than one year of age minimally benefitted from the micro finance services. It was also noted that default risk among the small businesses remains to be a challenge that micro credit lenders have to overcome for continued services provision. Working capital requirement was the leading reason for borrowing from micro finance institutions by the businesses.Unique contribution to theory, practice and policy: The study found that there was a good complementation between the existing micro finance institutions and the public entrepreneurial programs initiated by the government of Kenya such as Youth Entrepreneurs Development Fund, Women Enterprise Fund, Uwezo Fund and other County governments initiatives. The study recommended that the microfinance institutions should also be included in the distribution channel of these public funds for stronger linkage with the target groups. The MFIs should also utilize Credit Reference Bureau services to reduce the problem of default.

scholarly journals The Role of Financial Inclusion in Women Entrepreneurs in Small and Medium Enterprises: Evidence from South Western Nigeria

2020 ◽  
pp. 16-23
Author(s):  
Oyebamiji, Funmilola Florence
Keyword(s):  
Financial Institutions ◽  
Rural Areas ◽  
Women Entrepreneurs ◽  
Small And Medium Enterprises ◽  
Internet Banking ◽  
Financial Inclusion ◽  
Southwestern Nigeria ◽  
Financial Products ◽  
Medium Enterprises

The study examines the role of financial inclusion in women entrepreneurs in Small and Medium Enterprises (SMEs) with particular reference to southwestern Nigeria.  Purposive sampling technique was employed to select 120 respondents from Lagos, Abeokuta, Ibadan, Osogbo, Akure and Ado-Ekiti.  A structured questionnaire designed for the study was used to collect data. Data analysis was performed with helps of mean, frequency, and simple percentages. The result shows that contribution, cooperative society, family and friends, and non- governmental organizations are the main sources of finance of women entrepreneurs in SMEs, while only a few financial products being offered by financial institutions are known to women entrepreneurs in SMEs. Therefore, the study recommends that women entrepreneurs in SMEs should be sensitized about the availability of financial products/services being offered by financial institutions, relaxing the conditions attached to loans, reduction of interest rate, and bring internet banking closer to the people especially women entrepreneurs in rural areas.

Implementation of Inclusive Finance in Empowering Micro, Small and Medium Enterprises (UMKM) at Micro Waqf Banks

2021 ◽  
Vol 5 (1) ◽  
pp. 82
Author(s):  
Rahma Jaziyatul Chikmiyah
Keyword(s):  
Financial Literacy ◽  
Financial Services ◽  
Qualitative Method ◽  
Small And Medium Enterprises ◽  
Financial Inclusion ◽  
National Strategy ◽  
Classic Problem ◽  
The Government ◽  
Medium Enterprises ◽  
The Impact

<p><em>This study aimed to analyze the impact of the implementation of financial inclusion at Al-Fithrah Micro Waqf Bank regarding the empowerment of Empowering Micro, Small and Medium Enterprises (MSME). Even though MSME sectors have become a central foundation for the economy, the capital limitation is still considered a classic problem. It influences the government to release National Strategy Financial Inclusion to provide financial services that all levels of society can access. The indicators inclusive financial consists of access, usage and quality to realize empowerment through financing and assistance. This research used a descriptive qualitative method, and data were collected through interviews, observations, and documentation. The results showed that the financial inclusion component had been implemented but still has many potentials to be maximized. The components of access and usage have been appropriately implemented in terms of physical aspects and prices that are easily accessible to customers. These two components have an impact on increasing customer Islamic financial literacy. In the quality component, product variations are expected to fulfill the different business needs of customers. Meanwhile, financing has not significantly impacted fulfilling the welfare component’s capital needs  because the nominal value is too small. Furthermore, business assistance has a more significant impact on improving the business and spiritual aspects</em><em> of clients</em><em>.</em></p><p align="left"> </p><p>Penelitian ini bertujuan untuk menganalisis dampak penerapan keuangan inklusif pada Bank Wakaf Mikro Al-Fithrah terhadap pemberdayaan UMKM di sekitarnya. Meskipun sektor UMKM telah menjadi fondasi yang cukup sentral bagi perekonomian, keterbatasan permodalan masih menjadi masalah klasik UMKM. Hal ini mendorong pemerintah untuk mengeluarkan Strategi Nasional Keuangan Inklusif yang bertujuan untuk memberikan layanan keuangan yang dapat diakses seluruh lapisan masyarakat. Indikator keuangan inklusif yang terdiri dari akses, penggunaan dan kualitas diterapkan untuk mewujudkan pemberdayaan UMKM melalui pembiayaan dan pendampingan. Penelitian ini menggunakan metode deskriptif kualitatif melalui pengumpulan data wawancara, observasi, dan dokumentasi. Hasil penelitian menunjukkan bahwa komponen keuangan inklusif telah diimplementasikan namun masih berpotensi untuk dimaksimalkan. Komponen akses dan penggunaan sudah terlaksana dengan baik dilihat dari segi fisik dan harga yang mudah dijangkau nasabah. Kedua komponen tersebut berdampak pada peningkatan literasi keuangan syariah nasabah. Pada komponen kualitas, variasi produk diharapkan dapat memenuhi kebutuhan modal nasabah yang berbeda. Sedangkan untuk komponen kesejahteraan, pembiayaan belum memberikan pengaruh signifikan untuk memenuhi kebutuhan permodalan karena nilai nominal yang terlalu kecil. Selain itu, program pendampingan usaha (HALMI) memiliki dampak yang lebih signifikan terhadap peningkatan usaha dan spiritual pelanggan.</p>

scholarly journals Digital Financial Inclusion and Sustainable Growth of Small and Micro Enterprises—Evidence Based on China’s New Third Board Market Listed Companies

2020 ◽  
Vol 12 (9) ◽  
pp. 3733 ◽  
Author(s):  
Liu Yang ◽  
Youtang Zhang
Keyword(s):  
Financial Services ◽  
Small And Medium Enterprises ◽  
Listed Companies ◽  
Sustainable Growth ◽  
Financial Inclusion ◽  
High Tech ◽  
Financial Industry ◽  
Medium Enterprises ◽  
The Impact ◽  
Micro Enterprises

The United Nations’ 2030 Agenda for Sustainable Development aims to promote inclusive and sustainable economic growth and encourage the formalization and growth of micro, small, and medium enterprises through access to financial services. This study examines the impact and mechanism of the digital financial inclusion on the sustainable growth of small and micro enterprises in China. For this purpose, it uses the data from China’s New Third Board Market listed companies from 2011 to 2018 and the digital financial inclusion index of Peking University. The results show that the development of digital financial inclusion helps promote the sustainable growth of small and micro businesses, particularly in private, high-tech industries, and competitive markets. The impact mechanism of this development prevents any financial crisis caused by the capital structure imbalance and capital liquidity problems of small and micro enterprises by alleviating the financing constraints, thus promoting their sustainable growth. The research results show that, under the background of high-quality development of China’s economy, continuous promotion of digital financial inclusion and reshaping of the ecological pattern of the financial industry can provide steady financial support for the sustainable growth of small and micro enterprises, and realize the healthy development of micro enterprises and macro economy.

scholarly journals FINANCIAL INCLUSION AND PERFORMANCE OF MICRO, SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA

2017 ◽  
Vol 5 (3) ◽  
pp. 104-122
Author(s):  
Bassey Ina Ibor ◽  
Amenawo Ikpa Offiong ◽  
Enyeokpon Samuel Mendie
Keyword(s):  
Rural Areas ◽  
Financial Services ◽  
Small And Medium Enterprises ◽  
Design Method ◽  
Financial Inclusion ◽  
Easy Access ◽  
Chi Square ◽  
Access Points ◽  
Medium Enterprises ◽  
The Impact

Financial inclusion assures easy access to financial services by enabling the disadvantaged and vulnerable sections of the society to actively contribute to development and protect themselves against socio-economic shocks. Nigeria has a sizeable rural poor population with limited access to conventional financial institutions or services. This study investigated the impact of financial inclusion on the micro, small and medium enterprises (MSMEs) performance in Nigeria. The survey research design method was used, involving the use of questionnaires, in collecting data from respondents. Data were analyzed using the Pearson Chi-square technique. The results show that, whereas financial inclusion positively and significantly impacts the operations and growth of MSMEs, distance to financial services access points and infrastructural deficiency challenged fast and effective access to financial services by MSMEs in Nigeria. The study recommends that deliberate efforts should be made to spread access points to more rural areas and improve infrastructure to promote FI. This should include a policy roadmap for expanding financial services access points to unbanked and underserved areas using the financial services geospatial map. Furthermore, the digitizing of payments across the country should be prioritized to include enhanced ICT/E-banking tools and a consumer protection framework.

scholarly journals Development Strategy for Micro, Small and Medium Enterprises through Islamic Financial Inclusion

2020 ◽  
Vol 9 (1) ◽  
pp. 55
Author(s):  
Warno Warno ◽  
Novatul Isrowiyah ◽  
Rahman El Junusi
Keyword(s):  
Development Strategy ◽  
Sampling Method ◽  
Small And Medium Enterprises ◽  
Financial Inclusion ◽  
Three Dimensions ◽  
Significant Positive Effect ◽  
Medium Enterprises ◽  
The Impact ◽  
Positive Effect ◽  
Observation Period

This study calculates and analyzes the Islamic financial inclusion index which covers three dimensions; accessibility, availability, and usage of sharia banking. The results showed that the level of Islamic financial inclusion in Indonesia was classified as low during the study period and DKI Jakarta Province was the most inclusive province in Indonesia. Furthermore, this study analyzes the effect of the Islamic financial inclusion index on Islamic financing channeled to Micro, Small and Medium Enterprises (MSMEs) in Indonesia. Using the saturated sampling method, a total of 33 provinces in Indonesia were selected as samples with an observation period. The results show that the Islamic Financial Inclusion Index (IIK) has a significant positive effect on sharia financing channeled to the MSME sector, one of the regions that appears to be growing faster than other regions is Aceh. This research is different from previous financial sector inclusiveness studies that still see and study conventional (non-sharia) financial inclusion and find out the impact of sharia financial inclusion based on sharia financial inclusion indexes on sharia financing distributed to Micro, Small and Medium Enterprises in Indonesia and discuss comprehensively for MSME.

scholarly journals DEVELOPMENT BANKING SERVICES FOR THE POOR

2021 ◽  
Vol 71 (2) ◽  
Author(s):  
Mykola Miroshnik ◽  
Iryna Didenko
Keyword(s):  
Social Relations ◽  
Low Income ◽  
Banking Sector ◽  
State Regulation ◽  
Financial Inclusion ◽  
Poor People ◽  
Microfinance Institutions ◽  
Banking Services ◽  
The Poor ◽  
Wide Range

Despite the many achievements of the XXI century in the development of economic and social relations, comprehensive globalization and digitalization of most sectors of the national economy, the problem of poverty remain still quite urgent worldwide. That is why its improvement is recognized as one of the goals of sustainable development adopted by the UN. Moreover, according to the World Bank in the 2017, more than 1.7 billion adults were not served in banking institutions (or were unbanked), which indicates another pressing problem - financial inclusion. All this presupposes the high relevance of the study of the basic practices of the banking services development for the poor people, which is the main goal of this article. To achieve this goal, the paper proposes to conduct a conceptual analysis of the phenomenon of financial inclusion and highlight the main factors that affect it (territorial, financial, educational, legal, psychological), as well as such group of the population as low-income (or poor). Based on this, the author considered two main practices that can be used to develop the market of banking services. First, the model of branchless banking is considered, which involves use of a wide range of retail agents (for exampl'e, mobile operators, post offices, gas stations, retail outlets, etc.). It allows the poor, regardless of territorial and financial constraints, receive basic banking services from such retail agents, and banks to act as their guarantor. Secondly, model of microfinance for banks is researhed, which allows to provide financial resources for business initiatives of the poor people on fairly favorable terms.In this model, banks can also either provide such services directly, or involve intermediaries (primarily microfinance institutions) to interact with customers. Both of the above models have their advantages and risks for the banking sector, but their implementation will help not only to attract the unused (or unbanked) customer sector, but also to help overcome poverty in the country.The obtained results indicate the need for state regulation of the above models for their effectiveness in Ukraine and are the basis for more thorough research in this area.

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