Birmingham Business School leads on Inclusive Finance - a new £1.99m research project
It is well known that financial institutions and markets foster the flow of information about resource availability, especially the required financial resources for supporting economic growth. However, financial development alone cannot ensure financial inclusion – some households and enterprises are unable to fully participate in the financial sector; globally, some countries may not access international capital markets.
Moreover, the channels for financial development to promote inclusive finance are not clear and are not well studied. While new technology, such as mobile money transfer systems, has strengthened financial inclusion, gaps in access to finance as well as gaps in the development of financial systems seem to be getting wider following the 2007-09 global financial crisis. Overall, the current consensus is that there is urgent need for research on inclusive finance and its potential contribution to lifting low income countries to the level of their medium income peers.
Led by Professor Victor Murinde at the University of Birmingham, a consortium of partners will collaborate on a £2.02 million research project, on inclusive finance, funded under the DFID-ESRC Growth Research programme (DEGRP) Call 3 (2015/2016). The consortium is international with a focus on the North-South partnership, and it includes the UK (University of Birmingham; SOAS University of London; Institute of Development Studies at the University of Sussex; Loughborough University; the Overseas Development Institute; and the University of Nottingham), the Netherlands (CIBIF, Faculty of Economics and Business, the University of Groningen), North America (Université Laval in Québec, Canada and Columbia in the US) and, crucially, Africa (the University of Ghana-Legon; and the African Economic Research Consortium (AERC; Pan African, headquartered in Nairobi).
The research project focuses on delivering inclusive financial development, with a focus on low income countries in Africa. Professor Victor Murinde, the Principal Investigator, said “the project will: deliver rigorous, high quality research to support financial inclusion policies; develop innovative financial products in collaboration with households, banks, and the private sector; involve collaborative research to enhance methodologies and data for the promotion of inclusive finance; and engage with policy-makers to provide research-based advice on financial inclusion in Africa”.
Professor Murinde continued, “this research is vital for embedding financial inclusion in African economies, and aims ultimately to have a significant impact on livelihoods”.
“The conversation in Africa has now shifted, beyond the growth renaissance the region has witnessed over the years, to that of inclusive growth that is sustainable. Inclusive finance is at the center of this transformation, and hence the project is very timely. AERC is privileged to be a partner, since the project pervades its entire capacity building framework inclusive of research, collaborative graduate training, policy outreach, and vast network”, says Professor Lemma W. Senbet, AERC Executive Director and the William E. Mayer Chair Professor of Finance, University of Maryland.
To be delivered over a four year period (2016-2020), the research component of the project will address three core questions:
- How can institutional frameworks support inclusive financial development?
- What role do private and public capital inflows play in domestic financial inclusion in Africa?
- How can private and public institutions in Africa be a catalyst and channel for technological diffusion and financial inclusion?
The project’s other important dimensions pertain to (a) capacity building of early career researchers in low income countries, with a focus on Africa, to conduct policy-oriented research of global standards, (b) to influence policy dialogue and formulation among senior policy decision makers as well as non-state actors, such as the private sector.
A pre-launch was held in conjunction with the AERC Senior Policy Seminar on “Financial Inclusion”, for dialogue and input from stakeholders, including senior policy officials, private sector actors, and civil society, in Nairobi on 22nd - 23rd March, 2016.
DFID-ESRC Growth Research Programme (DEGRP) funds World class scientific research on inclusive finance.