Financial inclusion of remittance recipients and non-recipients in Mexico

Abstract

Purpose: Financial inclusion of remittance recipients has been seldom analyzed in Mexico. Studies about remittance reception have focused on the factors that explain their reception, their primary uses or whether they generate development in the receiving communities. We analyze the characteristics of remittance receiving and non-receiving households associated with their financial inclusion and the institutional actions aimed at fulfilling this task.

Design/methodology/approach: We carried out a quantitative study using the National Financial Inclusion Survey of 2015. We calculated a principal component analysis to generate a financial inclusion index, a latent class analysis and a linear regression model to estimate the effect of remittance reception and the socio-demographic characteristics on financial inclusion

Findings: We found that a low percentage of people have a high financial inclusion in Mexico. By focusing on the main characteristics of remittance recipients and non-recipients associated with financial inclusion, we found that the main variables that explain this inclusion are: age ¾the older the age, the more inclusion¾, being a head of household, schooling level ¾the more schooling, the more inclusion¾, living in urban areas, having a job, and receiving remittances.

Originality/value: We highlight the importance of considering the economic benefits that financial inclusion generates, as well as the implications that indebtedness can bring to households.