Financial inclusion of individuals who arrived as refugees to the United States

Abstract

We study determinants of financial inclusion for individuals with a refugee background (refugees) from over 30 countries residing in Utica, New York. We find that greater financial inclusion is associated with refugees who are male, more educated, employed, richer, older at time of migration, have better language skills, and have lived in the country longer. Financial inclusion also increases with the degree to which refugees trust financial institutions and decreases with the degree to which refugees' close friends are from the same ethnic group. Country of origin, religious affiliation, and religiosity are strong predictors in many specifications.

A systematic conceptual review of financial access

“…Examples of populations mentioned in the literature include low‐income people (Bae et al, 2012; Shah et al, 2012; Ambrosius, 2016; Gutiérrez & Teshima, 2016; Allam, 2020; Azevedo et al, 2021), those that are unbanked or underbanked (Azevedo et al, 2021; Birkenmaier et al, 2016; Llewellyn, 2021a; Llewellyn, 2021b), those living in rural areas (Ambrosius, 2016; Friedline et al, 2020; Romon & Sidhu, 2015), and communities of color (Friedline et al, 2020). Also specifically mentioned were immigrants and refugees (Gutiérrez & Teshima, 2016; Hagstrom & Pereira, 2021; Nam et al, 2019), various ethnicities (Nam et al, 2019), those that receive remittances (Ambrosius, 2016), those without a digital presence, such as older adults, low‐income, and people with disabilities (Ferretti, 2018), and those without mobile telephones (Alexander, 2021). Populations that use Alternative Financial Services (e.g., check cashing, payday loans, and money orders) were viewed as populations without financial access (Birkenmaier & Fu, 2019).…”

“…For example, the density of bank branches, ATM, and POS locations to populations and geographic areas is one such facilitator (Bae et al, 2012). Technology used for banking purposes (FinTech) (such as mobile banking) was discussed (Alexander, 2021; Baber, 2021; Blakstad & Allen, 2018; Friedline et al, 2020; Hagstrom & Pereira, 2021; Howell, 2020). Discrimination‐free banking was another aspect discussed (Bae et al, 2012).…”

“…Individual action and perceptions were identified as important as well. Individuals must choose to take action to own, purchase, and use products and services (Bae et al, 2012; Birkenmaier et al, 2022; Cámara, 2017; Cruz‐García et al, 2021; Hagstrom & Pereira, 2021; Huang et al, 2016). Trust in financial institutions (Ferretti, 2018; Wang & Guan, 2017; Xu, 2020), technology (Ferretti, 2018), and having psychological comfort with products and services is also critical (Jung, 2021).…”

“…The literature also featured socioeconomic and human development resulting from financial access (Ahlin & Jeong, 2021; Allam, 2020; Birkenmaier & Fu, 2019a; Mitchell et al, 2019; Soederberg, 2014; Stein & Yannelis, 2020), and the reduction of poverty and income and wealth inequality gaps (Ahmad et al, 2021; Alexander, 2021; Allam, 2020; Bae et al, 2012; Mbona, 2022; Mushtaq & Bruneau, 2019; Salami et al, 2021). Being less susceptible to fraud and abuse (Hagstrom & Pereira, 2021) was also mentioned. Broadly, community prosperity effects (Howell, 2020; Soederberg, 2014), and the realization of the human right to have financial access (Bae et al, 2012; Queralt, 2016) were also discussed.…”

“…The notion that intrinsic qualities and abilities of individuals needed to interact with financial products and services also shapes their financial access emerged from the literature (e.g., Bae et al, 2012; Cruz‐García et al, 2021; Fernández‐Olit et al, 2020; Glidden, 2019; Hagstrom & Pereira, 2021; Jung, 2021; Small et al, 2021; Xu, 2020), and is therefore included in the definition. These qualities and abilities relate to those conditions needed by individuals to choose and use available and helpful products and services.…”