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Remittances and Financial Inclusion: Evidence from El Salvador

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  • Anzoategui, Diego
  • Demirgüç-Kunt, Asli
  • Martínez Pería, María Soledad

Abstract

This paper investigates the impact of remittances on financial inclusion. Using household-level survey data for El Salvador, we examine whether remittances affect households’ use of savings and credit instruments from formal financial institutions. We find that although remittances have a positive impact on financial inclusion by promoting the use of deposit accounts, they do not have a significant and robust effect on the demand for and use of credit from formal institutions. If anything, by relaxing credit constraints, remittances might reduce the need for external financing from financial institutions, while at the same time increasing the demand for savings instruments.

Suggested Citation

  • Anzoategui, Diego & Demirgüç-Kunt, Asli & Martínez Pería, María Soledad, 2014. "Remittances and Financial Inclusion: Evidence from El Salvador," World Development, Elsevier, vol. 54(C), pages 338-349.
  • Handle: RePEc:eee:wdevel:v:54:y:2014:i:c:p:338-349
    DOI: 10.1016/j.worlddev.2013.10.006
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    Cited by:

    1. Ggombe Kasim Munyegera & Tomoya Matsumoto, 2015. "ICT for Financial Inclusion: Mobile Money and the Financial Behavior of Rural Households in Uganda," GRIPS Discussion Papers 15-20, National Graduate Institute for Policy Studies.
    2. Carmen Hoyo & Ximena Pena & David Tuesta, 2013. "Demand factors that influence financial inclusion in Mexico: analysis of the barriers based on the ENIF survey," Working Papers 1337, BBVA Bank, Economic Research Department.
    3. Ambrosius, Christian & Cuecuecha, Alfredo, 2016. "Remittances and the Use of Formal and Informal Financial Services," World Development, Elsevier, vol. 77(C), pages 80-98.
    4. repec:spr:svcbiz:v:11:y:2017:i:3:d:10.1007_s11628-016-0318-1 is not listed on IDEAS
    5. Gloria Clarissa O. Dzeha, 2016. "The decipher, theory or empirics: a review of remittance studies," African Journal of Accounting, Auditing and Finance, Inderscience Enterprises Ltd, vol. 5(2), pages 113-134.
    6. Clemens, Michael A., 2017. "Violence, Development and Migration Waves: Evidence from Central American Child Migrant Apprehensions," IZA Discussion Papers 10928, Institute for the Study of Labor (IZA).
    7. Ximena Pena & Carmen Hoyo & David Tuesta, 2014. "Determinantes de la inclusion financiera en Mexico a partir de la ENIF 2012," Working Papers 1414, BBVA Bank, Economic Research Department.
    8. Leonardo Bonilla Mejía, 2016. "Choques externos y remesas internacionales en las regiones de Colombia," Documentos de trabajo sobre Economía Regional y Urbana 250, Banco de la Republica de Colombia.
    9. Ambrosius, Christian, 2012. "Are remittances a substitute for credit? Carrying the financial burden of health shocks in national and transnational households," Discussion Papers 2012/9, Free University Berlin, School of Business & Economics.
    10. Carmen Hoyo & Ximena Pena & David Tuesta, 2013. "Factores de demanda que influyen en la Inclusion Financiera en Mexico. Analisis de las barreras a partir de la ENIF," Working Papers 1336, BBVA Bank, Economic Research Department.
    11. Ambrosius, Christian & Cuecuecha, Alfredo, 2013. "Are Remittances a Substitute for Credit? Carrying the Financial Burden of Health Shocks in National and Transnational Households," World Development, Elsevier, vol. 46(C), pages 143-152.
    12. Christian Ambrosius, 2016. "Remittances and Financial Access: Is There Really a Link and for Whom? Evidence from Mexican Household Data," The World Economy, Wiley Blackwell, vol. 39(7), pages 964-982, July.
    13. repec:aes:amfeco:v:46:y:2017:i:19:p:640 is not listed on IDEAS
    14. repec:taf:oxdevs:v:44:y:2016:i:4:p:458-478 is not listed on IDEAS
    15. Michael Clemens and Timothy N. Ogden, 2014. "Migration as a Strategy for Household Finance: A Research Agenda on Remittances, Payments, and Development- Working Paper 354," Working Papers 354, Center for Global Development.

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    Keywords

    remittances; financial inclusion;

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