Remittances and Financial Inclusion: Micro-Level Empirical Evidence from Uzbekistan

Remittances influence the adoption of financial services by recipients who are mostly poor and financially excluded. Extensive evidence in literature suggests the positive impact of remittances on financial inclusion. However, these studies may provide biased results because most studies do not provide information under which conditions recipients adopt other financial products or services. This limits the applicability of their findings to policymakers who want to harness the full potential of remittances to promote financial inclusion and financial development. The purpose of this study is to examine the factors shaping the saving behavior of remittance recipients. Uzbekistan provides the best context for our study as it is one of the largest remittance-receiving countries with a significantly underdeveloped financial sector. Our analysis shows that gender, age, amount and duration of remittances have a significant impact on the likelihood of accepting bank deposits.