Behavioral finance and financial inclusion: A conceptual review and framework development
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Abstract
This review paper examines the intersection of behavioral finance and financial inclusion, offering a conceptual framework to address the behavioral barriers hindering access to formal financial services. Through an analysis of key behavioral factors—including risk perception, overconfidence, present bias, and social norms—and an evaluation of existing interventions, the paper highlights the complexities of financial decision-making and the challenges of expanding financial inclusion. The proposed framework outlines intervention strategies to promote positive financial behaviors and empower individuals to achieve greater financial well-being. By integrating behavioral insights into policy design and implementation, policymakers and practitioners can enhance the effectiveness of financial inclusion efforts, ultimately fostering economic empowerment and sustainable development.