Dimensions of global financial inclusion and their impact on the achievement of the United Nations Development Goals

Abstract

Financial inclusion as a policy measure is important because it not only helps the underprivileged with access to and use of financial services but also paves the way for economic growth and helps in increasing efficiency and maintaining stability in an economy. This paper discusses the dimensions of global financial inclusion and their impact on the achievement of the United Nations Development Goals. For this purpose, the study focuses on composite indexes for three dimensions of financial inclusion (access, usage, and quality), constructed using principal component analysis (PCA). This study considers a panel of 153 economies in three years (2011, 2014, and 2017) and employs feasible generalized least squares (FGLS) in the analysis. The findings suggest that improvement in the dimensions of financial inclusion paves the way for higher economic growth, better-quality education for all and gender equality and women empowerment. At the same time, it reduces infant mortality rate and income inequality.