1. bookVolume 17 (2021): Issue 2 (June 2021)
Journal Details
License
Format
Journal
First Published
30 Mar 2015
Publication timeframe
4 times per year
Languages
English
access type Open Access

Financial Inclusion-Exclusion Paradox: How Banked Adults become Unbanked Again

Published Online: 30 Jun 2021
Page range: 44 - 50
Received: 07 May 2021
Accepted: 13 Jun 2021
Journal Details
License
Format
Journal
First Published
30 Mar 2015
Publication timeframe
4 times per year
Languages
English
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

JEL Classification

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