Financial inclusion and nutrition among rural households in Rwanda

Abstract

Using Rwandan Integrated Household Living Conditions surveys (2013/2014 and 2016/17), we investigate whether financial inclusion leads to improved nutrition in rural Rwanda. Our empirical evidence shows a robust positive impact of financial inclusion by formal financial institutions, although informal institutions like tontines were ineffective in improving food expenditure or nutrition. Furthermore, the heterogeneous marginal effects of financial inclusion reduce the gender gap between the food expenditure and nutrition of female- and male-headed households. The results, hence, suggest that the country should promote formal financial inclusion to provide wide-ranging welfare effects by improving food security, nutrition and food expenditure in its rural communities.