Financial inclusion-exclusion paradox: how banked adults become unbanked again

Peterson Kitakogelu Ozili

MPRA Paper from University Library of Munich, Germany

Abstract: This paper analyses how financially included adults might become unbanked again. Agents of financial inclusion incorporate economic and social constraints in the delivery of formal financial services. These constraints limit the ability of poor banked adults to use basic financial services to the fullest. The constraints affect agents of financial inclusion positively, and affect customers negatively up to a point where the marginal benefit of being financially included is negative for poor customers. When the marginal benefit of using formal financial services becomes negative, the affected banked adults may discontinue using their formal accounts or exit the formal financial sector when they can no longer bear the negative effect of social and economic constraints that hinder their ability to enjoy basic financial services to the fullest.

Keywords: Financial inclusion; financial institutions; financial exclusion; banked adults; formal accounts; paradox; access to finance; households; constraints. (search for similar items in EconPapers)
JEL-codes: G00 G02 G18 G21 H24 O12 O17 (search for similar items in EconPapers)
Date: 2021-06
New Economics Papers: this item is included in nep-fle, nep-iue and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in Financial Internet Quarterly 2.17(2021): pp. 43-49

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:108494

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