Financial Decision and Poverty: Examining the Financial Behavior of the Extreme Poor in Nigeria

The study examines the relationship between poverty and finance so as to ascertain if poverty has an impact on the quality of financial decision taken by the poor and financially vulnerable individuals. The study utilised a unique methodology (truncated regression) and applied a survey data to investigate the quality of loan usage among the extreme poor in Nigeria. We allowed for the inclusion of other policy relevant variables that may likely inform the direction of new generation poverty alleviation policies like gender, education and age of the individuals. We find that the extreme poor use more of the loans for other non-developmental issues like funeral and marriage celebrations than for productive and poverty alleviating ventures. However, the younger males engage more in this act than the females. Also, as the poor become more educated, they are able to use more of the loan for development-oriented investments like purchase of assets, building houses and even furthering their education. A major policy implication of this result is that loans should be directed towards younger individuals, and education should be a focal priority in selecting who to fund

Financial Decision and Poverty Nexus in Nigeria

The study examines the relationship between poverty and financial decision in Nigeria so as to ascertain if poverty has an impact on the quality of financial decisions taken by the poor and financially vulnerable individuals. The study utilised a unique methodology (truncated regression) and applied a survey data from the Afrobarometer dataset to investigate the quality of loan usage among the extreme poor in Nigeria. We allowed for the inclusion of other policy relevant variables that may likely inform the direction of new generation poverty alleviation policies like gender, education and age of the individuals. We find that the extremely poor group use more of the loans for other non-developmental issues like funeral and marriage celebrations than for productive and poverty alleviating ventures. However, the younger males engage more in this act than the females. Also, as the poor become more educated, they are able to use more of the loan for development-oriented investments like purchase of assets, building houses and even furthering their education. A major policy implication of this result is that loans should be directed towards younger individuals, and education should be a focal priority in selecting who to fund

How Terrorism Explains Capital Flight from Africa

We assess the effects of terrorism on capital flight in a panel of 29 African countries for which data is available for the period 1987-2008. The terrorism dynamics entail domestic, transnational, unclear and total terrorisms. The empirical evidence is based on Generalised Method of Moments (GMM) with forward orthogonal deviations and Quantile regressions (QR). The following findings are established. First, for GMM, domestic, unclear and total terrorisms consistently increase capital flight, with the magnitude relative higher from unclear terrorism. Second, for QR: (i) the effect of transnational terrorism is now positively significant in the top quantiles (0.75th and 0.90th) of the capital flight distribution, (ii) domestic and total terrorisms are also significant in the top quantiles and (iii) unclear terrorism is significant in the 0.10th and 0.75th quantiles. Policy implications are discussed