FINANCIAL INCLUSION AS AN INDICATOR OF MANAGEMENT OF BANK COMPONENT OF THE STATE FINANCIAL SECURITY

Z B Zhyvko,N V Zachosova

doi:10.18371/fcaptp.v1i28.163929

Abstract

It is established that financial inclusion is an instrument that is capable of transforming savings into investment and, therefore, it can be an effective tool for raising the level of financial sovereignty of the state and stabilizing its financial security. The necessity of updating methodological approaches to assessing the financial security at the macro level was substantiated by supplementing the list of indicators of the state of the banking component of the financial security system of Ukraine by the indicator of financial inclusiveness in the banking sector. The definition of financial inclusion in the sphere of banking services and of management of bank security is offered. It is found out that World Bank analytical materials are currently the only relevant source of information about the level of financial inclusion in different countries of the world, and in national economies internal experts do not assess the level of financial inclusion. Taking into account this circumstance, it is suggested, using the information of domestic statistics, to formulate judgments on the state of financial inclusion in the sphere of banking services by indicators that characterize the level of use different types of banking operations by population and business structures. An analysis was made and a critical comment on the financial inclusion of Ukrainians to the banking services segment as of the beginning of 2018 was provided. It has been established that in Ukraine the level of financial inclusion in the last few years is lower than the value that is inherent for its global indicator. Assumptions regarding availability of reserves in the financial system of Ukraine for the growth of the level of financial inclusion in the future are made. Based on a retrospective analysis of financial results and key performance indicators of banks in Ukraine, the need to take measures to increase the level of financial inclusiveness of the population and business entities based on the growth of their interest in the use of banking products and services has been substantiated. The possibilities of using the indicator of financial inclusion level as an indicator of the state of the banking component of the state financial security management are revealed.

Highlights

Financial inclusion is essential for achieving a reduction in poverty and for sustained economic growth
Under the financial inclusiveness of the banking services, we suggest to understand the integration of the population and business structures in the process of banking through the implementation of banking products and services
Thanks to information from World Bank experts we can conclude that in Ukraine the level of financial inclusion in the last few years is lower than the value that is inherent in its global indicator (Table 1)

Summary

Introduction

Financial inclusion is essential for achieving a reduction in poverty and for sustained economic growth. The study of financial inclusion as an indicator of the management of the banking component of the financial security of the state is a new non-standard view of issue, widely discussed in the world, but is only occasionally mentioned in the national scientific and practical scopes. Experts assess bank security with such indicators, as: the proportion of overdue loans in the total volume of loans granted by banks to residents of Ukraine; the ratio of bank loans and foreign currency deposits; shares of foreign capital in the authorized capital of banks; the ratio of long-term (over 1 year) loans and deposits; profitability of assets; the ratio of liquid assets to short-term liabilities and the share of assets of the five largest banks in the aggregate assets of the banking system We consider it necessary to supplement this list with an indicator of financial inclusiveness in the banking sector. Thanks to information from World Bank experts we can conclude that in Ukraine the level of financial inclusion in the last few years is lower than the value that is inherent in its global indicator (Table 1)

World Ukraine World Ukraine

Funds of economic entities

Findings

Value of the indicator