Journal Article

The geography of financial inclusion across Europe during the global crisis

Germana Corrado and Luisa Corrado

in Journal of Economic Geography

Volume 15, issue 5, pages 1055-1083
Published in print September 2015 | ISSN: 1468-2702
Published online January 2015 | e-ISSN: 1468-2710 | DOI: https://dx.doi.org/10.1093/jeg/lbu054
The geography of financial inclusion across Europe during the global crisis

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  • Household Behaviour and Family Economics
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This article identifies the main determinants of financial inclusion, defined as the probability of using both banking and credit services, across 18 Eastern European economies and 5 Western European ‘comparator’ countries. We elicit demographic and socio-economic information on 25,000 European households from the second round of the Life in Transition Survey undertaken during the 2008–2010 global crisis; the survey also includes several questions on households’ financial decisions collecting data at the regional and local level. Our results show that households hit by negative job or income shocks and without any asset to pledge are less likely to be financially included, especially in Eastern Europe. The individual likelihood of financial inclusion is also affected by the average use of financial services at the local level suggesting the presence of a financial multiplier effect. These results provide useful information for mapping financial inclusion across Europe during the crisis, which in turn can inform policy action at the local level.

Keywords: Financial inclusion; banking and credit; financial multiplier; global financial crisis; bivariate probit; D14; G21

Journal Article.  13447 words.  Illustrated.

Subjects: Household Behaviour and Family Economics ; Banking

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