Abstract
The purpose of this paper is to investigate the relationship between the financial inclusion index and development variables in the least developed countries in Asia and Africa by using annual data of 42 countries for the period 2000–2019. The pooled panel regression and panel data analysis technique are used to explore this relationship. The empirical finding indicates that economic growth leads to financial inclusion. Unemployment and literacy rates are among the factors contributing to financial inclusion, and it is observed that women are more vulnerable than men are to lack financial inclusion. In less developed countries, the economy relies heavily on agriculture, and people are less financially inclusive when they live in rural areas of these countries. Also, pay inequality reduces financial inclusion rates and has a negative impact on development. The low financial inclusion rate reduces the levels of development in these countries. The results of this study can lead to the development and empowerment of vulnerable groups in the studied countries. In order to improve the conditions for development, policymakers should consider policies that enhance literacy, eliminate gender inequality and increase pay equality.
Highlights
Financial inclusion (FI) can be defined as the process ensuring that individuals, households and businesses in a community have adequate access to formal financial services and products such as transactions, credit cards, payments, savings and insurance, and that these are delivered in a sustainable way (Singh & Singh Kondan, 2011).Over the last years, financial inclusion has become one of the most critical issues in the area of monetary policy
We first used pooled panel regression to find the relationship between the financial inclusion index and the underlying economic and social variables to better understand development
The results indicate a significant relationship between the financial inclusion index and literacy rates and educational attainment, and there was a clear, negative relationship between the index and rural populations
Summary
Financial inclusion (FI) can be defined as the process ensuring that individuals, households and businesses in a community have adequate access to formal financial services and products such as transactions, credit cards, payments, savings and insurance, and that these are delivered in a sustainable way (Singh & Singh Kondan, 2011).Over the last years, financial inclusion has become one of the most critical issues in the area of monetary policy. Financial inclusion (FI) can be defined as the process ensuring that individuals, households and businesses in a community have adequate access to formal financial services and products such as transactions, credit cards, payments, savings and insurance, and that these are delivered in a sustainable way (Singh & Singh Kondan, 2011). Growing evidence shows that inclusive financial markets reduce rates of poverty and inequality by allowing individuals and households to manage consumption and Cicchiello et al Journal of Innovation and Entrepreneurship (2021) 10:49 payments, receive bank loans, have insurance coverage (Mader, 2018). In a recent study, Koomson et al (2020) find evidence that an increase in financial inclusion reduce the poverty of Ghanaian households, especially of those headed by women, and prevent their exposure to future poverty
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