The Impact of Formal Financial Inclusion on Informal Financial Intermediation and Cash Preference : Evidence from Africa
This paper examines the effect of formal financial intermediation (inclusion) on informal financial intermediation and use of cash for economic activities. Using data from the Global Findex 2014, we examine whether the use of formal financial intermediaries reduces cash preference and the use of informal financial intermediaries. Our empirical results show that informal financial intermediation is positively associated with formal financial inclusion. This indicates that the relation between informal and formal financial intermediation is complementary rather than a trade-off, which demonstrate the importance informal finance play in the financial system of Africa. Moreover, the use of formal financial intermediaries significantly reduces the preference for holding cash, implying that robust financial system infrastructure has the potential of mobilizing excess liquidity in the informal economy of Africa for growth and development
Year of publication: |
2018
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Authors: | Alhassan, Abidin |
Other Persons: | Li, Leon (contributor) ; Reddy, Krishna (contributor) |
Publisher: |
[2018]: [S.l.] : SSRN |
Subject: | Afrika | Africa | Finanzintermediation | Financial intermediation | Finanzielle Inklusion | Financial inclusion | Informelle Wirtschaft | Informal economy |
Saved in:
freely available
Extent: | 1 Online-Ressource (32 p) |
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Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 28, 2018 erstellt |
Other identifiers: | 10.2139/ssrn.3221660 [DOI] |
Classification: | O12 - Microeconomic Analyses of Economic Development ; G2 - Financial Institutions and Services ; D2 - Production and Organizations |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10012913851