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Remittances and Financial Inclusion: Evidence from El Salvador

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

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.

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Article provided by Elsevier in its journal World Development.

Volume (Year): 54 (2014)
Issue (Month): C ()
Pages: 338-349

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Handle: RePEc:eee:wdevel:v:54:y:2014:i:c:p:338-349
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