2.7 CONCEPTS OF HOUSING FINANCE
2.7.1 FINANCIAL INCLUSION
The definition of Financial inclusion differs from individuals and enterprises according to a dichotomous division as either included or not according to Trike and Faye (2013).In addition Joshi (2008), defines financial inclusion as the process of ensuring access to appropriate financial products and services needed by all groups of people (weaker sections and low income) at an affordable cost in a fair and transparent manner.
Table 2. 1. Dimensions of Financial Inclusion
Access
The Availability of formal regulated financial services, physical proximity and affordability.
Usage It Refers to the actual usage of financial services and products; regulation ,frequency/duration of time …show more content…
It uses a frame work that recognizes that the massive number of excluded people will gain access to finance only if financial services for the marginalized (poor) are integrated into all three levels of the financial system: micro, meso, and macro. Ultimately, this integration opens financial accessibility to the poor majority living in developing countries. This is shown in a simplified figure below;
Figure 2. 3:Concept of Financial Inclusion Source: Helms (2006)
Clients: These are at the centre of the financial system and their demand for financial services drives the actions of those at different levels.
Micro: This is the backbone of the financial systems which includes financial service providers. These micro-level service providers run the gamut from informal money lenders or savings clubs to commercial banks and encompass everything in-between.
Meso. This level includes the basic financial infrastructure and the range of services required to reduce transactions costs, increase accessibility, build skills, and foster transparency among financial service providers.
Macro. An appropriate legislative and policy framework is necessary to allow sustainable access to financial products to flourish. Central banks, Ministries of finance, and other national Government entities constitute the primary macro-level …show more content…
Imagine that the interest rate on your savings account is 1% per year and inflation was 2%per year. After one year how much would you be able to buy with the money in the account?
a) More than today b) Exactly the same c) Less than today
3. Please tell me whether this statement is true or false: “buying a single company’s stock usually provides a safer return than a stock mutual fund”
a)True b)False
The model after being used concluded that the literacy levels rises steeply with education. Therefore the more educated people are the more they are likely to get the answer correctly according to Lusardi, and Michell (2007). This model was also used to study the financial literacy of people in the United Kingdom, U.S.A, Australia and other parts of the world. (Ibid)
2.7.3 THEORY OF DEMAND AND
2.7.1 FINANCIAL INCLUSION
The definition of Financial inclusion differs from individuals and enterprises according to a dichotomous division as either included or not according to Trike and Faye (2013).In addition Joshi (2008), defines financial inclusion as the process of ensuring access to appropriate financial products and services needed by all groups of people (weaker sections and low income) at an affordable cost in a fair and transparent manner.
Table 2. 1. Dimensions of Financial Inclusion
Access
The Availability of formal regulated financial services, physical proximity and affordability.
Usage It Refers to the actual usage of financial services and products; regulation ,frequency/duration of time …show more content…
It uses a frame work that recognizes that the massive number of excluded people will gain access to finance only if financial services for the marginalized (poor) are integrated into all three levels of the financial system: micro, meso, and macro. Ultimately, this integration opens financial accessibility to the poor majority living in developing countries. This is shown in a simplified figure below;
Figure 2. 3:Concept of Financial Inclusion Source: Helms (2006)
Clients: These are at the centre of the financial system and their demand for financial services drives the actions of those at different levels.
Micro: This is the backbone of the financial systems which includes financial service providers. These micro-level service providers run the gamut from informal money lenders or savings clubs to commercial banks and encompass everything in-between.
Meso. This level includes the basic financial infrastructure and the range of services required to reduce transactions costs, increase accessibility, build skills, and foster transparency among financial service providers.
Macro. An appropriate legislative and policy framework is necessary to allow sustainable access to financial products to flourish. Central banks, Ministries of finance, and other national Government entities constitute the primary macro-level …show more content…
Imagine that the interest rate on your savings account is 1% per year and inflation was 2%per year. After one year how much would you be able to buy with the money in the account?
a) More than today b) Exactly the same c) Less than today
3. Please tell me whether this statement is true or false: “buying a single company’s stock usually provides a safer return than a stock mutual fund”
a)True b)False
The model after being used concluded that the literacy levels rises steeply with education. Therefore the more educated people are the more they are likely to get the answer correctly according to Lusardi, and Michell (2007). This model was also used to study the financial literacy of people in the United Kingdom, U.S.A, Australia and other parts of the world. (Ibid)
2.7.3 THEORY OF DEMAND AND