IDEAS home Printed from https://ideas.repec.org/a/wly/jintdv/v35y2023i2p272-295.html
   My bibliography  Save this article

Digital credit and the gender gap in financial inclusion: Empirical evidence from Kenya

Author

Listed:
  • Constantin Johnen
  • Oliver Mußhoff

Abstract

Formal digital credit raises hopes to decrease the gender gap in financial inclusion. However, up until now, it remains unknown whether these hopes are justified. Using nationally representative household surveys from Kenya, the present study aims to fill this gap. We find strong indication that formal digital credit, contrasting to expectations, has led to an increase in the gender gap in financial inclusion. We further find indication that the pervasive gender gap in the formal digital credit market is largely attributable to gender differences in socio‐economic variables in combination with a lack of contract term heterogeneity in that market. The paper suggests that policies to strengthen women's position in society and/or to encourage contract term heterogeneity in the formal digital credit market could decrease the gender gap in financial inclusion.

Suggested Citation

  • Constantin Johnen & Oliver Mußhoff, 2023. "Digital credit and the gender gap in financial inclusion: Empirical evidence from Kenya," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(2), pages 272-295, March.
    • Handle: RePEc:wly:jintdv:v:35:y:2023:i:2:p:272-295
    DOI: 10.1002/jid.3687
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/jid.3687
    Download Restriction: no
    File URL: https://libkey.io/10.1002/jid.3687?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Diagne, Aliou & Zeller, Manfred & Sharma, Manohar, 2000. "Empirical measurements of households' access to credit and credit constraints in developing countries," FCND briefs 90, International Food Policy Research Institute (IFPRI).
    2. Alfred Hannig & Stefan Jansen, 2010. "Financial Inclusion and Financial Stability : Current Policy Issues," Finance Working Papers 23124, East Asian Bureau of Economic Research.
    3. Haruna Sekabira & Matin Qaim, 2017. "Mobile money, agricultural marketing, and off-farm income in Uganda," Agricultural Economics, International Association of Agricultural Economists, vol. 48(5), pages 597-611, September.
    4. Suri, Tavneet & Bharadwaj, Prashant & Jack, William, 2021. "Fintech and household resilience to shocks: Evidence from digital loans in Kenya," Journal of Development Economics, Elsevier, vol. 153(C).
    5. Gershon Feder & Lawrence J. Lau & Justin Y. Lin & Xiaopeng Luo, 1990. "The Relationship between Credit and Productivity in Chinese Agriculture: A Microeconomic Model of Disequilibrium," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(5), pages 1151-1157.
    6. Fletschner, Diana, 2009. "Rural Women's Access to Credit: Market Imperfections and Intrahousehold Dynamics," World Development, Elsevier, vol. 37(3), pages 618-631, March.
    7. Xiangping Jia & Franz Heidhues & Manfred Zeller, 2010. "Credit rationing of rural households in China," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 70(1), pages 37-54, May.
    8. Freeman, H. A. & Ehui, Simeon K. & A. Jabbar, Mohammad, 1998. "Credit constraints and smallholder dairy production in the East African highlands: application of a switching regression model," Agricultural Economics, Blackwell, vol. 19(1-2), pages 33-44, September.
    9. Xiangping Jia & Franz Heidhues & Manfred Zeller, 2010. "Credit rationing of rural households in China," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 70(1), pages 37-54, May.
    10. Asli Demirguc-Kunt & Leora Klapper, 2013. "Measuring Financial Inclusion: Explaining Variation in Use of Financial Services across and within Countries," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 44(1 (Spring), pages 279-340.
    11. Minh Chau Tran & Christopher E.C. Gan & Baiding Hu, 2016. "Credit constraints and their impact on farm household welfare," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 43(8), pages 782-803, August.
    12. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    13. Asli Demirguc-Kunt & Leora Klapper, 2013. "Measuring Financial Inclusion: Explaining Variation in Use of Financial Services across and within Countries," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(1 (Spring), pages 279-340.
    14. Kellie J. Archer & Stanley Lemeshow, 2006. "Goodness-of-fit test for a logistic regression model fitted using survey sample data," Stata Journal, StataCorp LP, vol. 6(1), pages 97-105, March.
    15. Hannig, Alfred & Jansen, Stefan, 2010. "Financial Inclusion and Financial Stability: Current Policy Issues," ADBI Working Papers 259, Asian Development Bank Institute.
    16. Demombynes, Gabriel & Thegeya, Aaron, 2012. "Kenya's mobile revolution and the promise of mobile savings," Policy Research Working Paper Series 5988, The World Bank.
    17. Adegbite, Olayinka O. & Machethe, Charles L., 2020. "Bridging the financial inclusion gender gap in smallholder agriculture in Nigeria: An untapped potential for sustainable development," World Development, Elsevier, vol. 127(C).
    18. Carlos Cinelli & Chad Hazlett, 2020. "Making sense of sensitivity: extending omitted variable bias," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 82(1), pages 39-67, February.
    19. Thomas Bauer & Silja Göhlmann & Mathias Sinning, 2007. "Gender differences in smoking behavior," Health Economics, John Wiley & Sons, Ltd., vol. 16(9), pages 895-909, September.
    20. Valentina Brailovskaya & Pascaline Dupas & Jonathan Robinson, 2024. "Is Digital Credit Filling a Hole or Digging a Hole? Evidence from Malawi," The Economic Journal, Royal Economic Society, vol. 134(658), pages 457-484.
    21. Abhijit Banerjee & Dean Karlan & Jonathan Zinman, 2015. "Six Randomized Evaluations of Microcredit: Introduction and Further Steps," American Economic Journal: Applied Economics, American Economic Association, vol. 7(1), pages 1-21, January.
    22. Ghosh, Saibal & Vinod, D., 2017. "What Constrains Financial Inclusion for Women? Evidence from Indian Micro data," World Development, Elsevier, vol. 92(C), pages 60-81.
    23. Glenn Hoetker, 2007. "The use of logit and probit models in strategic management research: Critical issues," Strategic Management Journal, Wiley Blackwell, vol. 28(4), pages 331-343, April.
    24. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    25. Prashant Bharadwaj & Tavneet Suri, 2020. "Improving Financial Inclusion through Digital Savings and Credit," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 584-588, May.
    26. William Jack & Tavneet Suri, 2014. "Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution," American Economic Review, American Economic Association, vol. 104(1), pages 183-223, January.
    27. Daniel Björkegren & Darrell Grissen, 2018. "The Potential of Digital Credit to Bank the Poor," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 68-71, May.
    28. Constantin Johnen & Martin Parlasca & Oliver Mußhoff, 2021. "Promises and pitfalls of digital credit: Empirical evidence from Kenya," PLOS ONE, Public Library of Science, vol. 16(7), pages 1-14, July.
    29. Munyegera, Ggombe Kasim & Matsumoto, Tomoya, 2016. "Mobile Money, Remittances, and Household Welfare: Panel Evidence from Rural Uganda," World Development, Elsevier, vol. 79(C), pages 127-137.
    30. Raquel Fonseca & Kathleen J. Mullen & Gema Zamarro & Julie Zissimopoulos, 2012. "What Explains the Gender Gap in Financial Literacy? The Role of Household Decision Making," Journal of Consumer Affairs, Wiley Blackwell, vol. 46(1), pages 90-106, March.
    31. Swamy, Vighneswara, 2014. "Financial Inclusion, Gender Dimension, and Economic Impact on Poor Households," World Development, Elsevier, vol. 56(C), pages 1-15.
    32. Ricardo Mora, 2008. "A nonparametric decomposition of the Mexican American average wage gap," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(4), pages 463-485.
    33. Minh Chau Tran & Christopher E.C. Gan & Baiding Hu, 2016. "Credit constraints and their impact on farm household welfare," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 43(8), pages 782-803, August.
    34. Agarwal, Sumit & Chomsisengphet, Souphala & Liu, Chunlin, 2011. "Consumer bankruptcy and default: The role of individual social capital," Journal of Economic Psychology, Elsevier, vol. 32(4), pages 632-650, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zaikun Hou & Jing Xu & Yongrok Choi & Yunning Ma, 2024. "The Impact of Digital Financial Inclusion on Household Commercial Insurance for Sustainable Governance Mechanisms under Regional Group Differences," Sustainability, MDPI, vol. 16(9), pages 1-16, April.
    2. Yangyang Zheng & Jianhong Lou & Linfeng Mei & Yushuang Lin, 2023. "Research on Digital Credit Behavior of Farmers’ Cooperatives—A Grounded Theory Analysis Based on the “6C” Family Model," Agriculture, MDPI, vol. 13(8), pages 1-19, August.
    3. Tim Ölkers & Oliver Mußhoff, 2024. "Exploring the role of interest rates, macroeconomic environment, agricultural cycle, and gender on loan demand in the agricultural sector: Evidence from Mali," Agribusiness, John Wiley & Sons, Ltd., vol. 40(2), pages 484-512, April.
    4. Muhammad Mehedi Masud & Abu Hanifa Md. Noman & Rulia Akhtar & Sonia Kumari A/P Selvarajan & Abdullah Al‐Mamun, 2024. "Does credit growth mitigate emission intensity in ASEAN countries?," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(2), pages 1324-1349, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shruti Malik & Girish Chandra Maheshwari & Archana Singh, 2019. "Understanding Financial Inclusion in India: A Theoretical Framework Building Through SAP–LAP and Efficient IRP," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 20(2), pages 117-140, June.
    2. Gallego-Losada, María-Jesús & Montero-Navarro, Antonio & García-Abajo, Elisa & Gallego-Losada, Rocío, 2023. "Digital financial inclusion. Visualizing the academic literature," Research in International Business and Finance, Elsevier, vol. 64(C).
    3. Francis Osei‐Tutu & Laurent Weill, 2021. "Sex, language and financial inclusion," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 29(3), pages 369-403, July.
    4. repec:zbw:bofitp:2020_009 is not listed on IDEAS
    5. Francis Osei‐Tutu & Laurent Weill, 2021. "Sex, language and financial inclusion," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 29(3), pages 369-403, July.
    6. Chaikal Nuryakin & Prani Sastiono & Faradina Alifia Maizar & Pyan Amin & Nanda Puspita & Wahyu Pramono & Christine Tjen, 2018. "Toward Higher Financial Inclusion Rate: Service Quality, Costs Of Access, And Awareness," LPEM FEBUI Working Papers 201821, LPEM, Faculty of Economics and Business, University of Indonesia, revised Jul 2018.
    7. Dar, Shafkat Shafi & Sahu, Sohini, 2022. "The effect of language on financial inclusion," Economic Modelling, Elsevier, vol. 106(C).
    8. Lee, Chien-Chiang & Chen, Pei-Fen & Chu, Pin-Jie, 2023. "Green recovery through financial inclusion of mobile payment: A study of low- and middle-income Asian countries," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 729-747.
    9. Johnen, Constantin & Parlasca, Martin & Mußhoff, Oliver, 2023. "Mobile money adoption in Kenya: The role of mobile money agents," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    10. N'dri, Lasme Mathieu & Kakinaka, Makoto, 2020. "Financial inclusion, mobile money, and individual welfare: The case of Burkina Faso," Telecommunications Policy, Elsevier, vol. 44(3).
    11. Singh, Nirvikar, 2018. "Financial Inclusion: Concepts, Issues and Policies for India," MPRA Paper 91047, University Library of Munich, Germany.
    12. Grohmann, Antonia & Klühs, Theres & Menkhoff, Lukas, 2018. "Does financial literacy improve financial inclusion? Cross country evidence," World Development, Elsevier, vol. 111(C), pages 84-96.
    13. Ahmad Hassan Ahmad & Christopher Green & Fei Jiang, 2020. "Mobile Money, Financial Inclusion And Development: A Review With Reference To African Experience," Journal of Economic Surveys, Wiley Blackwell, vol. 34(4), pages 753-792, September.
    14. Alicia Girón & Amirreza Kazemikhasragh & Antonella Francesca Cicchiello & Eva Panetti, 2022. "Financial Inclusion Measurement in the Least Developed Countries in Asia and Africa," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 1198-1211, June.
    15. Zhao, Yang & Goodell, John W. & Dong, Qingli & Wang, Yong & Abedin, Mohammad Zoynul, 2022. "Overcoming spatial stratification of fintech inclusion: Inferences from across Chinese provinces to guide policy makers," International Review of Financial Analysis, Elsevier, vol. 84(C).
    16. Agyekum, Francis K. & Reddy, Krishna & Wallace, Damien & Wellalage, Nirosha H., 2022. "Does technological inclusion promote financial inclusion among SMEs? Evidence from South-East Asian (SEA) countries," Global Finance Journal, Elsevier, vol. 53(C).
    17. Thereza Balliester Reis, 2022. "Socio‐economic determinants of financial inclusion: An evaluation with a microdata multidimensional index," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(3), pages 587-611, April.
    18. Dimaviya Eugène Compaore & Boukaré Maiga, 2024. "Socio-Economic Determinants of the Financial Inclusion of Women and Men in Burkina Faso: An Analysis using the Sequential Logit Model," International Journal of Economics and Financial Issues, Econjournals, vol. 14(3), pages 48-56, May.
    19. Daniel Kandie & Khan Jahirul Islam, 2022. "A new era of microfinance: The digital microcredit and its impact on poverty," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(3), pages 469-492, April.
    20. Chiara, De Gasperin & Valentina, Rotondi & Luca, Stanca, 2019. "Mobile Money and the Labor Market: Evidence from Developing Countries," Working Papers 403, University of Milano-Bicocca, Department of Economics, revised Mar 2019.
    21. Valentina Michelangeli & Eliana Viviano, 2024. "Can Internet Banking Affect Households' Participation in Financial Markets and Financial Awareness?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 56(4), pages 705-739, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:jintdv:v:35:y:2023:i:2:p:272-295. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/journal/5102/home .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.