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Challenges for financial inclusion: the role for financial education and new directions

Author

Listed:
  • Magda Bianco

    (Bank of Italy)

  • Daniela Marconi

    (Bank of Italy)

  • Angela Romagnoli

    (Bank of Italy)

  • Massimiliano Stacchini

    (Bank of Italy)

Abstract

Financial inclusion has received growing attention over the years as an enabling factor for promoting growth, reducing inequalities, and addressing poverty. In order to support policy choices aimed at enhancing financial inclusion, we investigate its main drivers, with a special focus on demand-side factors; more specifically, we enquire as to whether financial education may enhance financial inclusion. A cross-country analysis shows that, controlling for per capita GDP, higher levels of participation of individuals in economic life, greater financial knowledge and the existence of financial education strategies reduce the likelihood of a country being in the low financial inclusion segment. Moreover, as digitalization offers great opportunities to expand inclusion (but also some challenges), we provide evidence on the relationship between financial literacy and digital skills, showing that (at least in more advanced countries) digital skills are positively correlated with financial literacy from a young age. Based on our findings, we suggest some directions for future research, measurement and data collection, and policy actions.

Suggested Citation

  • Magda Bianco & Daniela Marconi & Angela Romagnoli & Massimiliano Stacchini, 2022. "Challenges for financial inclusion: the role for financial education and new directions," Questioni di Economia e Finanza (Occasional Papers) 723, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_723_22
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Financial inclusion; financial literacy; financial education;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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