The analysis of financial inclusion and its determinants in the rural area of south Wollo zone, Amhara Region, Ethiopia

The main goal of this study is to examine financial inclusion and related factors in rural South Wollo Zone areas. The binary logit model, primary and secondary data, and multi-stage sampling techniques were all applied in the study. Only 20.72 percent of those questioned in the rural South Wollo zo...

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Bibliographic Details
Published in:Cogent economics & finance 2022-12, Vol.10 (1), p.1-16
Main Authors: Dagnachew, Tefera Getachew, Mawugatie, Temeselew Woldetsadik
Format: Article
Language:English
Subjects:
Access
Affordability
Banking
binary logistic model
development and rural area
Financial inclusion
Financial institutions
Financial services
Islam
Islamic financing
Low income groups
Rural areas
Rural communities
Secondary education
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Summary:The main goal of this study is to examine financial inclusion and related factors in rural South Wollo Zone areas. The binary logit model, primary and secondary data, and multi-stage sampling techniques were all applied in the study. Only 20.72 percent of those questioned in the rural South Wollo zone were given access to formal financial institutions, leaving 79.28 percent of those who were excluded. According to the report, access to traditional financial institutions is influenced favorably by factors such as affordability, financial literacy, age, and secondary education in rural areas, as well as the availability of Islamic banking services. Both the inability of rural inhabitants to access formal financial institutions and their lack of trust in traditional financial institutions represent significant obstacles. The study also looks into the expensive replacement of formal financial institutions in rural areas by traditional financial groups. Based on our research, we recommend that the government and other relevant organizations seek to improve the country's degree of financial inclusion in rural areas by offering formal financial services at a reasonable cost and by boosting the financial capacity of rural low-income groups.
ISSN:2332-2039
2332-2039
DOI:10.1080/23322039.2022.2146298