Financial Inclusion for Forcibly Displaced Persons
The Impact of Aid Conditions
DOI:
https://doi.org/10.57947/qrp.v62i4.86Keywords:
forcibly displaced persons, aid for trade, aid conditions, financial inclusion, financial servicesAbstract
Despite limited empirical evidence on the contribution of forcibly displaced persons (FDPs) to host countries' financial inclusion, this research critically examines the direct impact of FDPs inclusion in the financial system and explores the role of international development cooperation in facilitating financial inclusion. By analyzing data from 74 aid recipient countries over a seventeen-year period, employing fixed effects models and a two-step system generalized method of moments estimation technique, the study reveals novel finding that solely including FDPs in the financial system or relying solely on development cooperation does not enhance financial inclusion in developing countries. Rather, the combination of FDPs inclusion and development assistance to the financial sector emerges as an effective strategy for boosting financial inclusion levels. This research provides valuable insights into the design and implementation of policies aimed at fostering financial inclusion for FDPs and highlights the importance of international partnerships in achieving this goal.
References
Abate, C. A. (2022). The relationship between aid and economic growth of developing countries. Does institutional quality and economic freedom matter? Cogent Economics & Finance, 10(1). https://doi.org/10.1080/23322039.2022.2062092
Abebe, S. A. (2023). Refugee entrepreneurship. Systematic and thematic analyses and a research agenda. Small Business Economics, 60(1), 315–350. https://doi.org/10.1007/s11187-022-00636-3
Alhassan, A., Li, L., Reddy, K., & Duppati, G. (2019). The impact of formal financial inclusion on informal financial intermediation and cash preference. Evidence from Africa. Applied Economics, 51(42), 4597–4614. https://doi.org/10.1080/00036846.2019.1593316
Almohammad, D., Durrah, O., & Ahmed, F. (2021). Deciphering the motives, barriers and integration of Syrian refugee entrepreneurs into Turkish society. A SEM approach. Digital Policy, Regulation and Governance, 23(1), 59–76. https://doi.org/10.1108/DPRG-05-2020-0066
Al-Smadi, M. O. (2023). Examining the relationship between digital finance and financial inclusion. Evidence from MENA countries. Borsa Istanbul Review, 23(2), 464–472. https://doi.org/10.1016/j.bir.2022.11.016
Aportela, F. (2012). Effect of financial access on savings by low-income people. https://www.researchgate.net/publication/246019120_Effect_of_Financial_Access_on_Savings_by_Low-Income_People
Ashraf, N., Karlan, D., & Yin, W. (2010). Female empowerment. Impact of a commitment savings product in the Philippines. World Development, 38(3), 333–344. https://doi.org/10.1016/j.worlddev.2009.05.010
Aslan, G., Deléchat, C., Newiak, M., & Yang, F. (2017). Inequality in financial inclusion and income inequality (IMF Working Paper No. 17/236). https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3079566#
Atiyat, F. A. (2018). The socio-economic impact of Syrian refugees on the local communities in Mafraq governorate/Jordan. Sociological field study Jordan. Jordan Journal of Social Sciences, 1(11).
Ben Ali, M. S., Fhima, F., & Nouira, R. (2020). How does corruption undermine banking stability? A threshold nonlinear framework. Journal of Behavioral and Experimental Finance, 27, 100365. https://doi.org/10.1016/j.jbef.2020.100365
Betts, A., Bloom, L., & Weaver, N. (2015). Refugee innovation. Humanitarian innovation that starts with communities. https://www.rsc.ox.ac.uk/files/files-1/refugee-innovation-web-5-3mb.pdf
Blundell, R., & Bond, S. (2000). GMM Estimation with persistent panel data. An application to production functions. Econometric Reviews, 19(3), 321–340. https://doi.org/10.1080/07474930008800475
Burnside, C., & Dollar, D. (2000). Aid, policies, and growth. American economic review, 90(4), 847–868. https://doi.org/10.1257/aer.90.4.847
Cámara, N., & Tuesta, D. (2014). Measuring financial inclusion. A muldimensional index (BBVA Research Paper No. 14/26; available at SSRN). https://doi.org/10.2139/ssrn.2634616
Corrado, G. (2020). Institutional quality and access to financial services. Evidence from European transition economies. Journal of Economic Studies, 47(6), 1363–1376. https://doi.org/10.1108/JES-03-2019-0131
Demirgüç-Kunt, A., Klapper, L., Singer, D., Ansar, S., & Hess, J. (2020). The Global Findex Database 2017. Measuring financial inclusion and opportunities to expand access to and use of financial services. The World Bank Economic Review, 34(Supplement_1), S2–S8. https://doi.org/10.1093/wber/lhz013
Dupas, P., & Robinson, J. (2013). Savings constraints and microenterprise development. Evidence from a field experiment in Kenya. American Economic Journal: Applied Economics, 5(1), 163–192. https://doi.org/10.1257/app.5.1.163
El-Zoghbi, M., Chehade, N., Mcconaghy, P., & Soursourian, M. (2017). The role of financial services in humanitarian crises. https://www.cgap.org/sites/default/files/Forum-The-Role-of-Financial-Services-in-Humanitarian-Crises_1.pdf
Evans, O., & Adeoye, B. (2016). Determinants of financial inclusion in Africa. A dynamic panel data approach. University of Mauritius Research Journal, 22. https://mpra.ub.uni-muenchen.de/81326/1/MPRA_paper_81326.pdf
Fromentin, V. (2018). Remittances and financial development in Latin America and the Caribbean countries. A dynamic approach. Review of Development Economics, 22(2), 808–826. https://doi.org/10.1111/rode.12368
Georgiou, T., Baillie, L., Netto, G., & Paterson, S. (2023). Investigating technology concepts to support Rohingya refugees in Malaysia. Interacting with computers. https://doi.org/10.1093/iwc/iwad026
GIZ. (2022). Financial inclusion of refugees in Jordan. Knowledge note. https://www.giz.de/de/downloads/giz2022-en-financial-inclusion-refugees-jordan.pdf
Glavee-Geo, R., Shaikh, A. A., Karjaluoto, H., & Hinson, R. E. (2019). Drivers and outcomes of consumer engagement. International Journal of Bank Marketing, 38(1), 1–20. https://doi.org/10.1108/IJBM-01-2019-0007
Grohmann, A., Klühs, T., & Menkhoff, L. (2018). Does financial literacy improve financial inclusion? Cross country evidence. World Development, 111, 84–96. https://doi.org/10.1016/j.worlddev.2018.06.020
Habersky, E., & Damir, A. (2021). COVID-19 financing strategies for refugees and migrants in the Eastern Mediterranean Region. Eastern Mediterranean Health Journal, 27(12), 1229-1238. https://doi.org/10.26719/emhj.21.061
Hansen, H., & Tarp, F. (2001). Aid and growth regressions. Journal of Development Economics, 64(2), 547–570. https://doi.org/10.1016/S0304-3878(00)00150-4
Hasan, M., Le, T., & Hoque, A. (2021). How does financial literacy impact on inclusive finance? Financial Innovation, 7(1), 40. https://doi.org/10.1186/s40854-021-00259-9
Jiang, Y. D., Straub, C., Klyver, K., & Mauer, R. (2021). Unfolding refugee entrepreneurs’ opportunity-production process. Patterns and embeddedness. Journal of Business Venturing, 36(5), 106138. https://doi.org/10.1016/j.jbusvent.2021.106138
Kasuga, H. (2007). Evaluating the impacts of foreign direct investment, aid and saving in developing countries. Journal of International Money and Finance, 26(2), 213–228. https://doi.org/10.1016/j.jimonfin.2006.11.002
Kim, D.-W., Yu, J.-S., & Hassan, M. K. (2018). Financial inclusion and economic growth in OIC countries. Research in International Business and Finance, 43, 1–14. https://doi.org/10.1016/j.ribaf.2017.07.178
Lee, C.-C., Wang, C.-W., & Ho, S.-J. (2022). Financial aid and financial inclusion. Does risk uncertainty matter? Pacific-Basin Finance Journal, 71, 101700. https://doi.org/10.1016/j.pacfin.2021.101700
Martin, C. (2019). Roadmap to the sustainable and responsible financial inclusion of forcibly displaced persons. https://www.afi-global.org/wp-content/uploads/2020/07/Roadmap_FI-of-FDPs_122019_0.pdf
Maruta, A. A. (2019). Can aid for financial sector buy financial development? Journal of Macroeconomics, 62, 103075. https://doi.org/10.1016/j.jmacro.2018.11.003
Mookerjee, R., & Kalipioni, P. (2010). Availability of financial services and income inequality. The evidence from many countries. Emerging Markets Review, 11(4), 404–408. https://doi.org/10.1016/j.ememar.2010.07.001
Murshed, M., Ahmed, R., Al-Tal, R. M., Kumpamool, C., Vetchagool, W., & Avarado, R. (2023). Determinants of financial inclusion in South Asia. The moderating and mediating roles of internal conflict settlement. Research in International Business and Finance, 64, 101880. https://doi.org/10.1016/j.ribaf.2023.101880
Naceur, S. Ben, & Ghazouani, S. (2007). Stock markets, banks, and economic growth. Empirical evidence from the MENA region. Research in International Business and Finance, 21(2), 297–315. https://doi.org/10.1016/j.ribaf.2006.05.002
Neaime, S., & Gaysset, I. (2018). Financial inclusion and stability in MENA. Evidence from poverty and inequality. Finance Research Letters, 24, 230–237. https://doi.org/10.1016/j.frl.2017.09.007
Nguyen, T. T. H. (2021). Measuring financial inclusion. A composite FI index for the developing countries. Journal of Economics and Development, 23(1), 77–99. https://doi.org/10.1108/JED-03-2020-0027
Noorbakhsh, S., & Teixeira, A. A. C. (2023). Do refugee inflows contribute to the host countries’ entrepreneurial rates? A dynamic panel data analysis, 2000–2019. Journal of Enterprising Communities: People and Places in the Global Economy. https://doi.org/10.1108/JEC-09-2022-0137
Nyberg-Sorensen, N., Nicholas, V.H., & Engberg-Pedersen, P. (2002). The migration-development nexus. Evidence and policy options (IOM Migration Research Series No. 8) https://publications.iom.int/system/files/pdf/mrs_8.pdf
OECD. (2015). Financial education for migrants and their families. OECD/INFE policy analysis and practical tools. https://www.gpfi.org/sites/gpfi/files/documents/07-%20Financial%20Education%20for%20Migrants%20and%20Their%20Families.pdf
OECD. (2016). Financial education and long-term integration of refugees and migrants. https://www.oecd.org/daf/fin/financial-education/Financial-education-long-term-integration-refugees-migrants.pdf
Pinho, C., Varum, C., & Antunes, M. (2015). Under what conditions do structural funds play a significant role in European regional economic growth? Some evidence from recent panel data. Journal of Economic Issues, 49(3), 749–771. https://doi.org/10.1080/
2015.1072382
Pradhan, R. P., Arvin, B. M., Norman, N. R., Nair, M., & Hall, J. H. (2016). Insurance penetration and economic growth nexus. Cross-country evidence from ASEAN. Research in International Business and Finance, 36, 447–458. https://doi.org/10.1016/j.ribaf.2015.09.036
Rao, V. (2015). Developing the financial sector and expanding market instruments to support a post-2015 development agenda in Asia and the Pacific. https://www.adb.org/publications/developing-financial-sector-and-expanding-market-instruments-support-post-2015-agenda
Sahay, R., Čihák, M., Barajas, A., Mitra, S., Kyobe, A., Nian Mooi, Y., & Reza Yousefi, S. (2015). Financial inclusion. Can it meet multiple macroeconomic goals? (IMF Staff Discussion Note). https://www.imf.org/external/pubs/ft/sdn/2015/sdn1517.pdf
Santiso, C. (2001). Good governance and aid effectiveness: The World Bank and conditionality. The Georgetown Public Policy Review, 7, 1–22. https://www.researchgate.net/profile/Carlos-Santiso/publication/228959367_Good_Governance_and_Aid_Effectiveness_The_World_Bank_and_Conditionality/links/0f31753c34f7b24888000000/Good-Governance-and-Aid-Effectiveness-The-World-Bank-and-Conditionality.pdf
Sarma, M., & Pais, J. (2011). Financial inclusion and development. Journal of International Development, 23(5), 613–628. https://doi.org/10.1002/jid.1698
Tay, L.-Y., Tai, H.-T., & Tan, G.-S. (2022). Digital financial inclusion. A gateway to sustainable development. Heliyon, 8(6), e09766–e09766. https://doi.org/10.1016/j.heliyon.2022.e09766
TorontoCenter. (2019). Remove the barriers to women’s financial inclusion. https://www.torontocentre.org//videos/Barriers_to_Womens_Financial_Inclusion_Updated_Links.pdf
UNCTAD. (2021). Financial inclusion for development. Better access to financial services for women, the poor, and migrant work. https://unctad.org/system/files/official-document/ditctncd2020d6_en.pdf
UNHCR. (2023). Global Trends Forced Displacement in 2022. https://www.unhcr.org/global-trends-report-2022
Verme, P. (2023, March 28). Theory and evidence on the impact of refugees on host communities. World Bank Blogs. https://blogs.worldbank.org/dev4peace/theory-and-evidence-impact-refugees-host-communities
World Bank. (2022, March 29). Financial inclusion. Financial inclusion is a key enabler to reducing poverty and boosting prosperity. https://www.worldbank.org/en/topic/financialinclusion/overview
Zeqiraj, V., Sohag, K., & Hammoudeh, S. (2022). Financial inclusion in developing countries. Do quality institutions matter? Journal of International Financial Markets, Institutions and Money, 81, 101677. https://doi.org/10.1016/j.intfin.2022.101677
Downloads
Published
How to Cite
Issue
Section
Categories
License
Copyright (c) 2023 Quarterly on Refugee Problems - AWR Bulletin
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.