Cogent Economics & Finance

Diaspora Finance, Financial Inclusion and Sustainable Entrepreneurship in Emerging and Developing Economies

Diaspora finance has become an increasingly important component of the financial landscape of emerging and developing economies. Beyond traditional remittance flows, diasporas mobilize a diverse range of financial mechanisms, including direct investment, informal savings groups, rotating savings and credit associations, crowdfunding, digital financial platforms, microfinance, and other forms of transnational solidarity finance. These financial flows can alleviate financing constraints, facilitate access to capital, support entrepreneurial activity, and contribute to financial inclusion. Their importance is particularly pronounced in contexts where entrepreneurs and small and medium-sized enterprises (SMEs) face limited access to formal banking systems, underdeveloped financial markets, institutional weaknesses, and significant information asymmetries.

However, the economic and financial effects of diaspora finance remain insufficiently understood. While remittances and diaspora investments may relax liquidity constraints and provide alternative sources of entrepreneurial finance, their effects on firm creation, investment, innovation, survival, growth, and performance may depend strongly on local institutional and financial environments.

Diaspora finance operates at the intersection of formal and informal financial systems. Tontines, community-based savings mechanisms, family and social networks, microfinance institutions, and formal banking systems may coexist, compete, or complement one another. Understanding these interactions is particularly important in emerging and developing economies, where informal financial arrangements continue to play a major role in financing entrepreneurial activities.

At the same time, digitalization is transforming the architecture of transnational finance. Fintech platforms, mobile money, digital payment systems, crowdfunding, and other financial technologies are reducing transaction costs and creating new channels through which diasporas can finance individuals, entrepreneurs, and SMEs in their countries of origin. These developments raise important questions concerning financial inclusion, financial intermediation, financing constraints, transaction costs, trust, risk, regulation, and the relationship between formal and informal financial systems.

This Article Collection seeks to advance economic and financial research on these issues by examining how diaspora finance and transnational financial mechanisms shape access to finance, entrepreneurial financing, financial inclusion, and entrepreneurial outcomes in emerging and developing economies. The Article Collection aims to bring together theoretical and empirical research at the intersection of diaspora finance, financial inclusion, entrepreneurial finance, informal finance, and financial technology. We particularly encourage contributions that examine the mechanisms through which diaspora financial flows affect entrepreneurs, SMEs, households, financial intermediaries, and local financial ecosystems. We welcome micro-, meso-, and cross-country analyses and encourage research combining insights from financial economics, development finance, international finance, institutional economics, and entrepreneurial finance. Rigorous empirical contributions, comparative studies, longitudinal analyses, and research using original or innovative datasets are encouraged.

Submissions may address, but are not limited to, the following topics:

• Diaspora Finance and Entrepreneurial Financing
• Financial Inclusion and Informal Finance
• Fintech and Digital Transnational Finance
• Institutions, Governance and Financial Development

Among the questions that this Collection seeks to address are:

• How does diaspora finance affect entrepreneurs’ and SMEs’ access to external finance?
• Under what conditions do remittances become sources of productive and entrepreneurial investment?
• Can diaspora finance compensate for weaknesses in domestic financial institutions?
• Do informal diaspora financing mechanisms complement or substitute for banks and microfinance institutions?
• How do social, community, family, and religious networks influence access to diaspora finance and entrepreneurial capital?
• How do faith-based and religious diaspora financing mechanisms affect the allocation of financial resources and entrepreneurial investment in countries of origin?
• How do fintech and digital financial services transform the costs, accessibility, and allocation of transnational financial flows?
• What is the relationship between diaspora finance, financial inclusion, and entrepreneurial performance?
• How does institutional quality influence the allocation and effectiveness of diaspora financial flows?
• How do corruption and regulatory constraints affect diaspora investment and entrepreneurial finance?
• What explains differences in access to diaspora finance across entrepreneurs, firms, sectors, communities, and institutional contexts?

Please contact Dr. MK Huffman at mary.huffman@taylorandfrancis.com with any queries about discount codes regarding this Article Collection.

Please also be sure to select the appropriate Article Collection from the drop-down menu in the submission system, and select the section "Financial Economics."

Mamadou NDIONE is Associate Professor of Management at the University of Orléans (IAE Orléans), France, and a member of the VALLOREM Research Laboratory. His research focuses on SME finance and performance, microfinance, financial inclusion, entrepreneurship, and the sustainability of SMEs, with particular attention to emerging and developing economies. His work also explores the role of institutions, digital finance, and strategic orientations in shaping entrepreneurial and organizational outcomes. He has published in several peer-reviewed academic journals and regularly presents his research at international conferences.

Dr. Ndione declares no conflicts of interest regarding this work.