title: Three essays on financial inclusion in Africa and the Middle East

authors: Alhassan, Abidin Ali

subjects: financial inclusion

abstract: This thesis investigates the determinants and/or barriers to financial inclusion in Africa and the Middle East. Financial inclusion, which is defined as individuals and businesses having access to useful and affordable financial products and services that meet their needs and which are delivered in a responsible and sustainable way, remains a huge challenge facing developing regions of the world, including Africa and the Middle East. According to the Global Findex database, Africa and the Middle East remains behind the world in terms of the number of people who have access to financial services. 
This study therefore examines the African and the Middle East regions where 43% and 48% of the population are characterised as financially included while nearly 98 million people are informally served. It is also estimated that approximately US $3 billion is kept under mattresses in Sub Saharan Africa (Demirguc-Kunt, Klapper, Singer, Ansar, & Hess, 2018). The main goal of financial inclusion is to improve the range, quality, and availability of financial services and products to the unserved, under-served, and financially excluded. Financial inclusion has recently attracted political attention and risen to prominence on a national, regional, and global agenda. To create a fully inclusive financial system, it is imperative to address the needs of the different users of the system in order to make financial products and services attractive. Therefore, identifying the drivers of financial products and services usage will enhance take-up of financial products, deepen the local financial industry, stimulate economic growth, and ultimately reduce poverty. 
A growing body of theoretical and empirical evidence suggests that financial sector development that focuses on financial inclusion provides the poor with the tools needed to escape poverty. To ensure sustainable access to, and use of, appropriate financial services, factors that deprive people from accessing these financial services are addressed. However, the very important factors that explicitly put barriers to financial inclusion are often ignored in the literature.  This thesis therefore fills this important gap in the literature. It provides evidence on these factors by undertaking three major related studies, of which each uses variables in local contexts with global implications to determine why people are still excluded from the financial system.
To elucidate the importance of and to determine the factors that hinder the development of financial inclusion, the author used data from the Global Findex database for 2011, 2014 and 2017. Data was also drawn from the World Bank’s world development indicators, world governance indicators, international telecommunication union, and research on ICT in Africa. These data sources aided the author to empirically examine the number of variables that are important for the studies in this thesis. The examination and analysis of the data and variables through various theoretical models provide important findings about the limited growth of financial inclusion in developing countries.
In the first study, the thesis examines how political instability impacts on financial inclusion in the Middle East and North Africa (MENA) region. In the wake of the political instability that engulfed the region, policy makers looked outside the region for potential guidance in order to raise economic growth and, ultimately, to resolve the instability. It provided the premise of this study’s investigation of how the instability variable affects the delivery of economic targets including financial inclusion. The study asks the question: what is the effect of political instability on financial inclusion in the MENA region? Given that endogeneity and an asymmetrical relationship could create a bias in the empirical results between political instability and financial inclusion, the study tested the asymmetrical relationship between political instability and financial inclusion using the probit model with sample selection, and a multiplicative interaction test of asymmetric models. Having satisfied the question of endogeneity, the study finds that political instability positively correlates with lower degrees of financial inclusion, indicating that political instability can lead to financial exclusion. Further, the study finds that higher incomes and higher education are associated with higher degrees of financial inclusion.  A lack of documentation required by formal financial institutions proves to be a major barrier to financial inclusion in the region, considering that a greater number of the population are in the informal sector. In addition, inefficient mechanisms to determine real interest rates, corruption, oil reliance, unemployment, and religious tensions also negatively affect financial inclusion. Finally, the study proposes and calculates the political stability threshold value that will trigger financial inclusion to be -0.960 for the MENA region.
In analysing how formal financial intermediation influences the use of informal financial intermediation and cash in Africa, the findings of the second study show that financial inclusion based on the use of formal financial intermediaries strongly correlates with the use of informal financial intermediaries. The study shows a strong complementary evidence between formal financial inclusion and informal financial intermediation but indicates a negative relationship with cash preference respectively. However, governments’ use of cash for poverty relief payments is found to negatively impact on financial inclusion. Informal financial intermediary groups building on long-standing traditions of revolving savings circles and credit associations that exist worldwide has contributed to the economic development of poor people in the past. Their impact on education, healthcare, and social management is evidence that they have sustained poor people.  In Africa, these intermediaries are the backbone of societies especially in rural areas. Their presence has evolved into community cooperatives that has a wider impact on their socio-economic wellbeing. ROSCAs and other forms of traditional institutions are significant devices for the poor in their attempts to diffuse the impact of shocks as well as building trust and social capital.
The third study in this thesis considers whether electricity supply and enabling regulation matter in relation to the adoption and use of mobile money to gain financial inclusion in Africa.  The hypothesised research model tested context-based constructs such as the availability of electricity, enabling regulation, and rural dwellings, with the technology acceptance model (TAM) to determine how these constructs affect peoples’ intentions and attitudes towards the adoption and continuous use of mobile money. Exploring these constructs using the structural equation modelling (SEM) technique, the empirical results suggest that the perceived availability of electricity is an important factor for the adoption and use of mobile money through the functionality of mobile phones. Perceived enabling regulation also shows a correlation with individuals’ intention to adopt and use mobile money. However, perceived rural dwelling is found to negatively correlate with individuals’ attitudes and intentions to adopt and use mobile money because of inadequate or limited network coverage in rural areas. As access to technology speeds up financial transactions, the costs for rendering financial services to the unbanked are reduced and provide better ways for the poor to manage their lives.
This thesis has policy implications in that MENA governments can reduce and eliminate political instability through greater financial inclusion of their populations, and by working towards the political stability threshold value of -0.960 to trigger financial inclusion. Because of the informal economies of Africa, mobile money adoption, which has defied the poverty nature of the people, can be the best alternative for financial inclusion. Governments can implement measures to disallow the use of cash for its poverty reduction payments by doing these through bank accounts and mobile money to increase financial inclusion among the poor.

text: Three essays on financial inclusion in Africa and the Middle East This thesis investigates the determinants and/or barriers to financial inclusion in Africa and the Middle East. Financial inclusion, which is defined as individuals and businesses having access to useful and affordable financial products and services that meet their needs and which are delivered in a responsible and sustainable way, remains a huge challenge facing developing regions of the world, including Africa and the Middle East. According to the Global Findex database, Africa and the Middle East remains behind the world in terms of the number of people who have access to financial services. 
This study therefore examines the African and the Middle East regions where 43% and 48% of the population are characterised as financially included while nearly 98 million people are informally served. It is also estimated that approximately US $3 billion is kept under mattresses in Sub Saharan Africa (Demirguc-Kunt, Klapper, Singer, Ansar, & Hess, 2018). The main goal of financial inclusion is to improve the range, quality, and availability of financial services and products to the unserved, under-served, and financially excluded. Financial inclusion has recently attracted political attention and risen to prominence on a national, regional, and global agenda. To create a fully inclusive financial system, it is imperative to address the needs of the different users of the system in order to make financial products and services attractive. Therefore, identifying the drivers of financial products and services usage will enhance take-up of financial products, deepen the local financial industry, stimulate economic growth, and ultimately reduce poverty. 
A growing body of theoretical and empirical evidence suggests that financial sector development that focuses on financial inclusion provides the poor with the tools needed to escape poverty. To ensure sustainable access to, and use of, appropriate financial services, factors that deprive people from accessing these financial services are addressed. However, the very important factors that explicitly put barriers to financial inclusion are often ignored in the literature.  This thesis therefore fills this important gap in the literature. It provides evidence on these factors by undertaking three major related studies, of which each uses variables in local contexts with global implications to determine why people are still excluded from the financial system.
To elucidate the importance of and to determine the factors that hinder the development of financial inclusion, the author used data from the Global Findex database for 2011, 2014 and 2017. Data was also drawn from the World Bank’s world development indicators, world governance indicators, international telecommunication union, and research on ICT in Africa. These data sources aided the author to empirically examine the number of variables that are important for the studies in this thesis. The examination and analysis of the data and variables through various theoretical models provide important findings about the limited growth of financial inclusion in developing countries.
In the first study, the thesis examines how political instability impacts on financial inclusion in the Middle East and North Africa (MENA) region. In the wake of the political instability that engulfed the region, policy makers looked outside the region for potential guidance in order to raise economic growth and, ultimately, to resolve the instability. It provided the premise of this study’s investigation of how the instability variable affects the delivery of economic targets including financial inclusion. The study asks the question: what is the effect of political instability on financial inclusion in the MENA region? Given that endogeneity and an asymmetrical relationship could create a bias in the empirical results between political instability and financial inclusion, the study tested the asymmetrical relationship between political instability and financial inclusion using the probit model with sample selection, and a multiplicative interaction test of asymmetric models. Having satisfied the question of endogeneity, the study finds that political instability positively correlates with lower degrees of financial inclusion, indicating that political instability can lead to financial exclusion. Further, the study finds that higher incomes and higher education are associated with higher degrees of financial inclusion.  A lack of documentation required by formal financial institutions proves to be a major barrier to financial inclusion in the region, considering that a greater number of the population are in the informal sector. In addition, inefficient mechanisms to determine real interest rates, corruption, oil reliance, unemployment, and religious tensions also negatively affect financial inclusion. Finally, the study proposes and calculates the political stability threshold value that will trigger financial inclusion to be -0.960 for the MENA region.
In analysing how formal financial intermediation influences the use of informal financial intermediation and cash in Africa, the findings of the second study show that financial inclusion based on the use of formal financial intermediaries strongly correlates with the use of informal financial intermediaries. The study shows a strong complementary evidence between formal financial inclusion and informal financial intermediation but indicates a negative relationship with cash preference respectively. However, governments’ use of cash for poverty relief payments is found to negatively impact on financial inclusion. Informal financial intermediary groups building on long-standing traditions of revolving savings circles and credit associations that exist worldwide has contributed to the economic development of poor people in the past. Their impact on education, healthcare, and social management is evidence that they have sustained poor people.  In Africa, these intermediaries are the backbone of societies especially in rural areas. Their presence has evolved into community cooperatives that has a wider impact on their socio-economic wellbeing. ROSCAs and other forms of traditional institutions are significant devices for the poor in their attempts to diffuse the impact of shocks as well as building trust and social capital.
The third study in this thesis considers whether electricity supply and enabling regulation matter in relation to the adoption and use of mobile money to gain financial inclusion in Africa.  The hypothesised research model tested context-based constructs such as the availability of electricity, enabling regulation, and rural dwellings, with the technology acceptance model (TAM) to determine how these constructs affect peoples’ intentions and attitudes towards the adoption and continuous use of mobile money. Exploring these constructs using the structural equation modelling (SEM) technique, the empirical results suggest that the perceived availability of electricity is an important factor for the adoption and use of mobile money through the functionality of mobile phones. Perceived enabling regulation also shows a correlation with individuals’ intention to adopt and use mobile money. However, perceived rural dwelling is found to negatively correlate with individuals’ attitudes and intentions to adopt and use mobile money because of inadequate or limited network coverage in rural areas. As access to technology speeds up financial transactions, the costs for rendering financial services to the unbanked are reduced and provide better ways for the poor to manage their lives.
This thesis has policy implications in that MENA governments can reduce and eliminate political instability through greater financial inclusion of their populations, and by working towards the political stability threshold value of -0.960 to trigger financial inclusion. Because of the informal economies of Africa, mobile money adoption, which has defied the poverty nature of the people, can be the best alternative for financial inclusion. Governments can implement measures to disallow the use of cash for its poverty reduction payments by doing these through bank accounts and mobile money to increase financial inclusion among the poor.

year: 2019

title: Bioerosion on shore platforms developed in the Waitemata Formation, Auckland

authors: Healy, Terry R.

subjects: Auckland

abstract: Bioerosion - the removal of lithic substrate by the erosive activities of living organisms- has not previously been discussed for New Zealand shore platforms. This paper aims at drawing attention to bioerosion as a process active in shore platform development. Detailed reference is made to bioerosion occurring on the alternating sandstones and siltstones of the Waitemata Formation found outcropping on the coastline around Auckland. In this area several facets of shore platform morphology may be attributed to the direct effects of boring and browsing marine organisms. A classification of animals causing bioerosion, based on mechanism of erosion, is presented, and the geomorphic significance of the various groups discussed.

text: Bioerosion on shore platforms developed in the Waitemata Formation, Auckland Bioerosion - the removal of lithic substrate by the erosive activities of living organisms- has not previously been discussed for New Zealand shore platforms. This paper aims at drawing attention to bioerosion as a process active in shore platform development. Detailed reference is made to bioerosion occurring on the alternating sandstones and siltstones of the Waitemata Formation found outcropping on the coastline around Auckland. In this area several facets of shore platform morphology may be attributed to the direct effects of boring and browsing marine organisms. A classification of animals causing bioerosion, based on mechanism of erosion, is presented, and the geomorphic significance of the various groups discussed.

year: 1968

title: "It's the controlling still". Power effects in the implementation of the bicultural/bilingual early childhood curriculum in Aotearoa/New Zealand.

authors: Ritchie, Jenny

subjects: racism

abstract: Racism is an undelying current within educational practice in Aotearoa/New Zealand. This paper discusses some of the data from a doctoral study that explored a particular teacher education context. In Aotearoa, the early childhood curriculum, Te Whariki, has a bicultural paradigm that requires a degree of bicultural and bilingual competence on the part of educators. This paper explores some of the issues around preparing teachers to deliver this curriculum, with a particular focus on racism.

text: "It's the controlling still". Power effects in the implementation of the bicultural/bilingual early childhood curriculum in Aotearoa/New Zealand. Racism is an undelying current within educational practice in Aotearoa/New Zealand. This paper discusses some of the data from a doctoral study that explored a particular teacher education context. In Aotearoa, the early childhood curriculum, Te Whariki, has a bicultural paradigm that requires a degree of bicultural and bilingual competence on the part of educators. This paper explores some of the issues around preparing teachers to deliver this curriculum, with a particular focus on racism.

year: 2005