How informal financial service institutes facilitate the financial inclusion of low-income, unbanked consumers
Kamran, S., & Uusitalo, O. (2024). How informal financial service institutes facilitate the financial inclusion of low-income, unbanked consumers. International Journal of Bank Marketing, Early online. https://doi.org/10.1108/ijbm-03-2023-0148
Julkaistu sarjassa
International Journal of Bank MarketingPäivämäärä
2024Tekijänoikeudet
© 2024 Emerald Publishing Limited
Purpose
The present study aimed to provide an understanding of the roles of community-based financial service organizations (i.e. rotating savings and credit associations [ROSCAs] as institutional pillars in facilitating low-income, unbanked consumers’ access to informal financial services).
Design/methodology/approach
Semi-structured interviews were conducted with 39 low-income, unbanked consumers participating in ROSCAs in Pakistan, where only 21% of adults have a bank account and almost four out of five individuals live on a low income. The obtained data were analyzed using the thematic analysis technique.
Findings
ROSCAs’ regulatory, sociocultural and cognitive aspects facilitate low-income, unbanked consumers’ utilization of informal financial services owing to their approachability by, suitability for, and fairness to such consumers. Thus, they promote such consumers’ financial inclusion.
Practical implications
Low-income consumers are mostly unable to access formal financial services due to the existing supply- and demand-side impediments. Understanding ROSCAs’ institutional functioning can help formal financial service providers create more transformative financial services based on the positive institutional aspects of ROSCAs to enhance poor consumers’ financial inclusion and well-being.
Social implications
The inclusion of low-income, unbanked consumers in formal banking services will help them better control their finances.
Originality/value
Many low-income, unbanked consumers in developing countries utilize informal financial services to meet their basic financial needs, but service researchers have rarely investigated how informal financial institutions function. The present study showed that ROSCAs, as informal institutions, meet low-income, unbanked consumers’ personal, social and financial needs in a befitting manner, which encourages such consumers to use the financial services offered by ROSCAs.
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Julkaisija
EmeraldISSN Hae Julkaisufoorumista
0265-2323Asiasanat
Julkaisu tutkimustietojärjestelmässä
https://converis.jyu.fi/converis/portal/detail/Publication/207662304
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