Financial Inclusion latest publications
The study analyzes the most relevant Contact-Free trends that have been reconfiguring our lives, that during the period of confinement and physical distancing due to the Covid-19 pandemic accelerated, and that will probably retain a strong dynamism in the coming years.
With Covid-19, it is not only necessary to take care of physical health, but also financial health, mainly because we are exposed to negative variations in income. The note presents recommendations in case of being under these variations.
September 4, 2020
Financial vulnerability of households facing COVID-19 pandemia: A global perspective
Lockdowns due to COVID-19 and the subsequent crisis have caused many individuals to stop working or substantially reduce their work hours, with the corresponding decrease or loss of the main source of income. The analysis of the financial vulnerability of households becomes especially important.
The COVID-19 pandemic is turning society's finances into a mixture of two diametrically opposed worlds, much the same as the tiny Lilliput and the gigantic Brobdingnag from Jonathan Swift's dystopian world in Gulliver's Travels.
As with other health crises throughout history, the world will change in many ways as a result of the COVID-19 pandemic. One of these transformations will be in the way people relate to their finances.
The essential lockdown measures and cessation of economic activity imposed by governments to controlCOVID-19 will have a negative impact on the economy as a whole and, in particular, on households.
Financial vulnerability refers to the ability of individuals or households to cope with a shock involving the loss of the main source of income. We establish the degree of financial vulnerability of Spanish households in three categories: highly vulnerable, vulnerable, and secure.
The ability to cope with financial shocks from one's own resources is called financial vulnerability. It is measured as the period of time that individuals can survive by covering their needs if they lose their main source of income and without using credit.