Dissatisfaction theory of financial inclusion

Ozili, Peterson K (2024): Dissatisfaction theory of financial inclusion. Forthcoming in:

Abstract

In explaining the cause of financial exclusion, dissatisfaction with the formal financial system stands out as a possible cause of financial exclusion according to the dissatisfaction theory of financial inclusion. This paper revisits the dissatisfaction theory of financial inclusion and extends the theory by providing an elaborate discussion of (i) the relationship between customer dissatisfaction and financial inclusion using a grid, (ii) the sources of customer dissatisfaction and (iii) ways to deal with customer dissatisfaction. The theory argues that previously banked adults who left the formal financial system and have become unbanked again can be brought back to the formal financial sector through persuasion if the element of dissatisfaction has been removed or resolved. The theory is significant because it explains one of the major reasons why people leave the formal financial system despite the availability of formal financial services and ease of access to financial services in the financial system.

• Item Type: MPRA Paper
• Language: English
• Keywords: financial services, access to finance, financial inclusion, dissatisfaction, digital financial inclusion
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation

References

Ade, O. J., & Festus, A. F. (2022). Financial Inclusion and Stakeholders Value: Employees and Management Staff, Customers, Creditors and Depositors in Deposit Money Banks in Nigeria. The International Journal of Business & Management, 10(5), 21-41.

AFI (2017) Defining Financial Inclusion. Alliance for Financial Inclusion. https://www.afi-global.org/wp-content/uploads/publications/2017-07/FIS_GN_28_AW_digital.pdf

Allen, F., Demirgüç-Kunt, A., Klapper, L. F., & Martinez Peria, M. S. (2012). The foundations of financial inclusion: Understanding ownership and use of formal accounts. World Bank Policy Research Working Paper, (6290).

Anderson, R. E., & Srinivasan, S. S. (2003). E-Satisfaction and E-Loyalty: A Contingency Framework. Psychology & Marketing, 20(2), 123–138.

Arbore, A., & Busacca, B. (2009). Customer satisfaction and dissatisfaction in retail banking: Exploring the asymmetric impact of attribute performances. Journal of Retailing and Consumer Services, 16(4), 271-280.

ASFP (2023). The State of Inclusion in the U.S. Financial System: Benchmarking Progress, Gaps, and Disparities. A Report published by the Aspen Institute Financial Security Program. November. Available at: https://www.aspeninstitute.org/publications/the-state-of-the-u-s-inclusive-financial-system-benchmarking-progress-gaps-and-disparities/

Asuming, P. O., Osei-Agyei, L. G., & Mohammed, J. I. (2019). Financial inclusion in sub-Saharan Africa: Recent trends and determinants. Journal of African Business, 20(1), 112-134.

Baber, H. (2019). Financial inclusion and FinTech: A comparative study of countries following Islamic finance and conventional finance. Qualitative Research in Financial Markets. 12(1), 24-42.

Belas, J., & Gabcova, L. (2014). Reasons for satisfaction and dissatisfaction of bank customers. Study from Slovakia and the Czech Republic. International Journal of Entrepreneurial Knowledge, 1(2), 4-13.

Bello, S. (2022). The Role of Waqf in Enhancing the Financial Inclusion of Women Entrepreneurs in Developing Countries. Journal of Islamic Business and Management, 12(1), 125-138.

Bello, S., Oyedokun, G. E., & Adeolu-Akande, M. (2021). Financial inclusion and gender-induced poverty in Nigeria. International Journal of Research in Business and Social Science (2147-4478), 10(8), 266-274.

Birkenmaier, J., & Fu, Q. (2018). Household financial access and use of alternative financial services in the US: two sides of the same coin?. Social Indicators Research, 139, 1169-1185.

Birkenmaier, J., Despard, M., Friedline, T., & Huang, J. (2019). Financial inclusion and financial access. In Encyclopedia of social work.

Birkenmaier, J. M & Fu. Q. (2019). Does consumer financial management behavior relate to their financial access? Journal of Consumer Policy, 42(3), 333-348. 10.1007/s10603-019-09418-z

Birkenmaier, J. M. & Fu, Q. (2022). Consumer financial access trends after the Great Recession: A Latent Transition Analysis. Journal of Financial Counseling and Planning, 33(2), 171-182.

Bloemer, J., Brijs, T., Swinnen, G., & Vanhoof, K. (2002). Identifying latently dissatisfied customers and measures for dissatisfaction management. International Journal of Bank Marketing, 20(1), 27-37.

Coye, R. W. (2004). Managing customer expectations in the service encounter. International Journal of service industry management, 15(1), 54-71.