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Social Indicators Research
Published in: Social Indicators Research 1/2022

05-09-2021 | Original Research

Financial Resilience: A Way Forward Towards Economic Development in Developing Countries

Authors: Fanny Salignac, Julien Hanoteau, Ioana Ramia

Published in: Social Indicators Research | Issue 1/2022

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Abstract

Financial inclusion is a policy priority in both developed and developing countries. Yet almost one in four people remain financially excluded around the globe, with the vast majority living in the developing world. In this paper, we argue that financial resilience: an individual’s ability to function effectively in adverse financial situations, can better help us assist people to cope with financial adversity, develop effective policy and, ultimately, improve economic development. This paper builds on an existing financial resilience measurement framework and adapts it to develop a measure appropriate to the context of developing countries. Indonesia, where one in three people are financially excluded, is used as a case country from which to draw conclusions. We use the Indonesia Family Life Survey and put forward the country’s first snapshot of financial resilience. Implications for research and policy are presented.
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Appendix
Available only for authorised users
Footnotes
1
Figures in US dollars per day are converted into annual values in Rupiah using the private consumption purchasing power parity-adjusted conversion factor, equal to 4,721 Rp. per USD in 2015 (source: https://​data.​worldbank.​org/​indicator/​).
 
2
We use 2, instead of 1.75, as the threshold that characterizes the lower end category of severe financial vulnerability. Using 1.75, only 1.9% of the sample would fall in that vulnerability category. Using 2, 6.2% of the sample falls in that category, which is more consistent with other studies explaining that 7% of the Indonesian population are extremely poor (World Bank, 2020), although we do not pretend that there should be an exact match between extreme poverty and severe financial vulnerability.
 
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Metadata
Title
Financial Resilience: A Way Forward Towards Economic Development in Developing Countries
Authors
Fanny Salignac
Julien Hanoteau
Ioana Ramia
Publication date
05-09-2021
Publisher
Springer Netherlands
Published in
Social Indicators Research / Issue 1/2022
Print ISSN: 0303-8300
Electronic ISSN: 1573-0921
DOI
https://doi.org/10.1007/s11205-021-02793-6

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