This paper observes the relationship between multiple variables in order to determine whether Financial Inclusion can be used as a tool for poverty reduction in the Middle East and North Africa. There are many reports that identify this to be function to something very likely as a tool around the world; however, there has been limited work regarding financial inclusion and the Middle East and North Africa. Through qualitative and quantitative research, this paper examines the possibility of this theory working in MENA. Wide income disparities, combined with government corruption, religious dispositions, and an overall lack of money are contributing barriers to the unbanked. These factors greatly limit the use of this tool until other issues are tackled and governments commit to more policies that will be conducive to growth; banks must be more open to lending; and people will have to become more financially literate.
The World Bank, Gallup, the IMF, and various authors, in addition to the World Bank FINDEX dataset are used to reference information conceded by well-respected authors in the financial-, development-, and in the government sector. Although there seems to be a great deal of promise with the concept of Financial Inclusion as a Tool for Poverty Reduction world wide, it seems to be very limited in MENA, in the poverty-stricken nations. Algeria, Egypt, Iraq, Jordan, Lebanon, Morocco, and Yemen are observed in the report. Generally, there are barriers preventing the implementation of inclusiveness, which will prevent the advancement of poverty alleviation. More government commitment is required.
At a glance
- Reanalyses World Bank Global FINDEX data from seven countries
- Includes the underlying charts and hypothesis-testing calculations
- 53 sources in the bibliography
Table of Contents
ABSTRACT
CHAPTER 1 INTRODUCTION
CHAPTER 2 BACKGROUND
2.1 PEOPLE’S DEMOCRATIC REPUBLIC OF ALGERIA
2.2 ARAB REPUBLIC OF EGYPT
2.3 REPUBLIC OF IRAQ
2.4 HASHEMITE KINGDOM OF JORDAN
2.5 LEBANESE REPUBLIC
2.6 KINGDOM OF MOROCCO
2.7 REPUBLIC OF YEMEN
CHAPTER 3 LITERATURE REVIEW
CHAPTER 4 METHODOLOGY
4.1 APPROACH
4.2 DATA GATHERING METHOD
4.3 DATABASE OF STUDY
4.4 VALIDITY OF DATA
4.5 ORIGINALITY AND LIMITATIONS
4.6 SUMMARY
CHAPTER 5 CORRELATIVE TEST HYPOTHESES
CHAPTER 6 RESULTS
6.1 QUALITATIVE DATA RESULTS
6.2 QUANTITATIVE DATA RESULTS
6.2.1 HYPOTHESES RESULTS
6.3 SUMMARY OF RESULTS
CHAPTER 7 CONCLUSION
Objectives and Topics
This dissertation asks whether financial inclusion can serve as a tool for reducing poverty in the Middle East and North Africa. It examines financial participation and its barriers in seven selected countries, combining analysis of survey data with research on regional economic, institutional and religious conditions.
- Financial inclusion and poverty reduction
- Country-level economic and demographic differences
- Income, account ownership and borrowing
- Religious and financial barriers to banking
- Islamic finance and microfinance
- Correlation testing using Global FINDEX data
Excerpt from the Book
4.1 Approach
The research method employed in this paper is a mixed method; that is, it combines both a qualitative and quantitative approach to data examination and analysis. This approach has been chosen due to the subjective nature of this topic. Indeed, an observation of the number of participants in the financial system is very important, and will be analyzed. There is, however, still a great deal of weight put upon expert opinions on the socio-economic situation in the region.
MENA is very heavily influenced by religion, according to many sources, and it affects many parts of the different cultures. Paradoxically, this region of the world has a high rate of corruption in the public sector. Understanding whether or not Financial Inclusion is a tool for poverty reduction in the region depends heavily on the culture, and the reasons individuals participate, or not, in the system.
The initial research stage is to understand, at a deeper level, financial inclusion. After this stage, a great deal of effort will be contributed to dissecting the World Bank Findex Data, and understand the results of the survey. The survey has many variables that will paint a picture of the region, the wealth (or lack thereof), religiosity, saving habits, and borrowing habits, amongst other dynamics. The data has fifty variables, including, but not limited to, the age of the respondents, the gender, the within-economy income class, respondent formal bank account activity, and reasons for non-participation.
The Pearson’s Correlation Coefficient will be the method of hypothesis testing in conjunction with scatter plots of the same data, in addition to other graphical analysis. The six hypotheses to be tested by the data correspond directly by the secondary data gathered. It is commonly accepted by nearly all of the secondary sources that there is a correlation between financial inclusion and decreased poverty levels. These tests are to identify if that is the case in the Middle East and North Africa. Chapter 5 covers the hypotheses in more detail.
In addition to the Datasets, a rigorously selected set of secondary sources was compiled that include experts from the World Bank, CGAP, recognized Universities, United Nations Columnists, and Islamic Economists who both support Islamic Banking, as well as those that see a need for reform in the Islamic banking system. These authors, including Asli Demirguc-Kunt, are very well respected researchers who have worked on Financial Inclusion as a topic for a long period.
Chapter Summaries
CHAPTER 1 INTRODUCTION: Introduces financial inclusion as a potential tool for poverty reduction and outlines the regional context and research aim.
CHAPTER 2 BACKGROUND: Describes economic and demographic conditions in Algeria, Egypt, Iraq, Jordan, Lebanon, Morocco and Yemen.
CHAPTER 3 LITERATURE REVIEW: Reviews research on poverty, financial access, Islamic finance and barriers to participation.
CHAPTER 4 METHODOLOGY: Explains the mixed-method approach, the Global FINDEX data, data collection and limitations.
CHAPTER 5 CORRELATIVE TEST HYPOTHESES: Sets out six hypotheses concerning income, account ownership, borrowing, lending rates and religious reasons for exclusion.
CHAPTER 6 RESULTS: Presents qualitative and quantitative analyses and discusses the hypothesis tests.
CHAPTER 7 CONCLUSION: Considers the conditions under which financial inclusion might contribute to poverty reduction in the selected countries.
Keywords
financial inclusion, poverty reduction, Middle East and North Africa, Global FINDEX, financial exclusion, bank account ownership, income inequality, Islamic banking, microfinance, informal borrowing, financial literacy, Pearson correlation, lending rates
Frequently Asked Questions
What is this dissertation about?
It examines whether financial inclusion can help reduce poverty in the Middle East and North Africa.
What are its central themes?
The main themes include access to formal finance, poverty, income disparities, borrowing, religious considerations and barriers to banking.
What is the primary research question?
The work asks whether financial inclusion can be used as a tool for poverty reduction in the selected countries of the region.
What research method does the author use?
The author combines qualitative analysis of existing research with quantitative analysis of Global FINDEX data and Pearson correlation tests.
What does the main body cover?
It provides country backgrounds, reviews relevant literature, explains the methodology, sets out hypotheses and discusses qualitative and quantitative results.
Which keywords characterise the work?
Key terms include financial inclusion, poverty reduction, Global FINDEX, Islamic banking, financial exclusion and income inequality.
Which countries are examined?
The study focuses on Algeria, Egypt, Iraq, Jordan, Lebanon, Morocco and Yemen.
What data underpin the quantitative analysis?
The analysis draws on country datasets from the World Bank’s Global FINDEX, supplemented by information from the CIA World Fact Book and other sources.
Which relationships are tested?
The hypotheses consider relationships among income, account ownership, formal borrowing, commercial lending rates, religious reasons for exclusion and borrowing from friends and family.
How does the dissertation address Islamic finance?
It discusses religious considerations in financial participation and examines financing practices including Murabaha, Qard-Hassan and Musharaka.
- Quote paper
- Stefan Johnson (Author), 2014, Financial Inclusion as a Tool for Poverty Reduction in the Middle East and North Africa, Munich, GRIN Verlag, https://www.grin.com/document/334694
