Determinants of using formal vs informal financial sector in BRICS group

Mbona Nokulunga and Major Klara

Finance Research Letters, 2023, vol. 55, issue PB

Abstract: The determinants of the usage of the formal versus the informal financial sector within the BRICS countries are analysed. Regression tree and probit methods are applied to a subset of observations from the 2021 Global Findex database. Results of these different methods are robust and complement each other. The main findings are: (a) Individuals with regular income has higher probability of using the formal financial sector; (b) There is a nonlinear relationship with age and the financial sector channels, individual above 36 are less likely to use the informal channel but are more likely to use the formal channel.

Keywords: Household finance; Financial inclusion (search for similar items in EconPapers)
JEL-codes: G21 G23 G51 O16 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:55:y:2023:i:pb:s1544612323003288

DOI: 10.1016/j.frl.2023.103956

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