Quality financial inclusion and financial vulnerability

Despite existing evidence suggesting that financial inclusion enhances consumers' welfare, there has been no attempt to examine the link between and vulnerability, measured along multiple dimensions. We computed more comprehensive indices of vulnerability using polychoric principal component analysis based on a nationally representative survey in South Africa. Results from quantile regressions show only top 20% financially included had lower but effect was weaker among vulnerable categories. Also, decline less pronounced when narrowly defined by excluding quality indicators. These findings suggest is benefitting few consumers Africa which points need for bottom-up approach designing products improve welfare consumers.