The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
Stacy Carlson, Era Dabla-Norris, Mika Saito, and Yu Shi
INTERNATIONAL MONETARY FUND
We examine the role of household financial access in determining the extent of risksharing
in Nigeria using household-level panel data. We estimate changes in the response
of consumption to shocks for households with formal and informal access to finance and
those without, both for the country as a whole and for different regions. Our findings
suggest that households with financial access who experience an unexpected negative
income shock see consumption fall by 15 percentage points less than those without access.
This result is mainly driven by households with informal financial access, and by
household savings rather than borrowing. Regional variation in risk sharing tends to be
significant, suggesting that financial inclusion efforts going forward should have a more