PROTOCOL: Impact of financial inclusion in low‐ and middle‐income countries: a systematic review of reviews

This study attempts to review the extant literature on financial inclusion, financial development innovation and monetary policy. It surveys literature between 2007 and 2015 and identifies key themes in this field of study, methodologies adopted, geographical distribution of the studies and synthesises these to identify relevant gaps and direction for future research. The study makes very intetersting finding. Common areas of study can be categorised as determinants, effects and evaluation of these concepts. Areas for discussions have focused on financial inclusion and its implications for monetary policy and financial stability. The linkage between financial inclusion and monetary policy has been studied in few instances and through models that estimate a direct relationship. Studies that estimate models which examine the mediating role of financial development and innovation on the impact of financial inclusion on monetary policy are yet to be done. Researchers have mostly modeled that, growth in financial innovation, financial development and financial inclusion on their own, do individually enhance growth in total factor productivity. These studies however do not explore the possible mediating effects of these factors on another in maximising their effects. Innovation can stir up financial inclusion through the availability of various products that either transfer or mitigate the risk of providing financial services to the unbanked. However, while innovation directly spurs financial inclusion effectively, how this relationship is affected at different levels of financial development is yet to be established. Literature has documented various ways in which increased financial inclusion could be beneficial for financial stability, but it is yet to be explored how sensitive this effect could be at different levels of financial depth. These are the gaps the study identifies and recommends to be filled by furture research. The study futher recommends that empirical examination of the effect of financial development on the relationship between financial innovation and financial inclusion be done in addition to cross-country and regional studies on the impact of financial inclusion on monetary policy using panel data.Keywords: Financial Inclusion, Financial Development, Financial Innovation, Monetary Policy, Financial Stability

Purpose: This research investigates the impact of financial inclusion on income equality and examines the prospect of a cashless policy for economic resilience in Nigeria. The study explores whether financial inclusivity could enhance income equality and assesses the effectiveness of the Central Bank of Nigeria's cashless policy. Study Design/Methodology/Approach: The research employed various statistical techniques, including fixed effect Instrumental Variable Regression (IVR), Instrumental Variable Quantile Regression (IVQR), and Logit regression. These methods were used to analyze the relationship between financial inclusion and income equality, as well as the feasibility of the cashless policy in Nigeria. Findings: The results demonstrate that financial inclusion significantly influences household income equality, particularly among lower-income groups. However, the impact of financial inclusion on income equality is not uniform across different levels of financial inclusion. Additionally, while financial inclusion shows promise for reducing inequality at lower income distributions, the cashless policy has limited potential to further promote financial inclusion in Nigeria. Policymakers may need to consider alternative strategies, such as agent banking, mobile money, or financial education programs, to sustain and enhance financial inclusion. Originality/Value: This study provides critical insights into the interplay between financial inclusion and income equality in Nigeria. It also offers a nuanced evaluation of the Central Bank of Nigeria's cashless policy, highlighting the need for more inclusive and adaptive approaches to strengthen financial systems and economic resilience.

The literature on the impact of financial inclusion on the instability of household consumption remains controversial. In this article, we considered the possibility that countries follow different regimes of household consumption instability and tested the hypothesis of whether financial inclusion is countercyclical or procyclical to a country's regime of consumption instability. Thus, relying on recent works that used the finite mixture regression method, we identify the different regimes of household consumption instability. Drawing on a sample of 28 developing countries over the period 2011–2020, the paper highlights that the impact of financial inclusion on consumption instability differs across classes and a three-class model best describes the sample. Specifically, we show that financial inclusion is positively associated with consumption instability in the first class, while financial inclusion significantly reduces consumption instability in the second class. Financial inclusion does not have a significant impact on the third class. Furthermore, exploring the potential role of democracy in determining class affiliation, the results emphasize that developing countries would fully benefit from financial inclusion by undertaking strong reforms to improve democracy.

This research investigates the influence of financial inclusion and digitalization on carbon dioxide (CO2) emissions by analyzing a sample of 38 countries from 2006 to 2020. For our analysis, we use the SGMM method and fixed-effect panel threshold models. Financial inclusion and digitalization are measured using newly constructed indices derived from principal component analysis. Despite some variations in specific details, the overall trend in the relationship among CO2 emissions, financial inclusion, and digitalization remains consistent across high-income and low- and middle-income countries. Our findings reveal that financial inclusion has a significant and non-linear impact on CO2 emissions. Conversely, digitalization is found to reduce CO2 emissions significantly. Furthermore, the threshold models indicate that the impact of financial inclusion on CO2 emissions varies depending on the levels of financial inclusion and digitalization. The influence of financial inclusion on CO2 emissions is lower at higher levels of financial inclusion and digital technology, and vice versa. Our findings have implications for policymakers who seek to develop economic policies for sustainable development. By adopting policies that promote digital technologies, policymakers can enhance financial inclusion and economic growth and reduce CO2 emissions.

Financial inclusion is the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society. The term financial inclusion has evolved since late 2000 and it’s directly correlated to poverty. More and more Indian companies are trying to enter in the list of fortune 500 and one of our Indian entrepreneurs appears in the list of the top five richest persons of the world. Financial inclusion has become an evolving paradigm of economic growth that plays very significant role in poverty alleviation. The main objective of the study is to analyze the impact of financial inclusion in the growth of Indian economy and the initiatives taken by the banking institution in India to attain inclusive growth.

The purpose of this study is to know the impact of financial inclusion on public financial services education through financial technology. This research was conducted in Sleman Regency because the area was quite large in Yogyakarta, and was ranked third. This type of research is quantitative research. Data collection methods used are questionnaires and literature studies. Data analyses used in this study are the validity test, reliability test, descriptive statistical test, and SEM (Structural Equation Modeling) analysis test. The results of this study found that financial inclusion has been proven to have no impact on public financial services education. However, financial inclusion has proven to have a significant impact on financial technology in Sleman Regency in 2018. In addition, financial inclusion through financial technology has also proven to have a positive impact on public financial service education in Sleman Regency in 2018.

Inclusive growth is the buzzword for the developing economies like India. After three decades of the post-liberalisation period we have to think whether our economic growth is really inclusive. The disparities or inequalities in income, education, health, drinking water, sanitation and shelter are still remaining a barrier to inclusive growth. Besides, gender-gap or male-female discrimination still cannot be eradicated from the society. The 11th Five Year Plan (2007-12) chartered a strategy for inclusive growth to bridge the divisions between ‘haves’ and ‘have not’. Financial inclusion is the key strategy to achieve inclusion growth. In August 2014 the Modi Government launched a financial inclusion programme, PMJDY, with the view to reach several necessary financial services to the remotest area at an affordable cost. Inclusive financial system mobilises more productive resources leading to economic growth and better opportunities for reduction in poverty. In this backdrop, the present paper focuses on the extent of financial inclusion, need of inclusive growth and impact of financial inclusion on inclusive growth in India.

This paper examines the influence of financial inclusion on economic growth in 37 developed countries and 21 emerging countries during the period 2006-2017. The GMM method is used to analyze panel data. The analysis results show that the financial inclusion has a positive effect on economic growth in developed and emerging countries. The impacts of financial inclusion on economic growth in developed countries has a steeper slope than in emerging countries. Besides financial inclusion, trade openness and intellectual property right also affect the economic growth of these countries.

Financial inclusion programmes seek to increase access to financial services such as credit, savings, insurance and money transfers. Despite a wealth of systematic review evidence, the impacts of financial inclusion are inconclusive. Hence, the first systematic review of systematic reviews was undertaken to synthesize the impacts of financial inclusion interventions on economic, social, gender and behavioural outcomes. Thirty-two systematic reviews were identified. The headline finding is that impacts are more likely to be positive than negative, but the effects vary, and appear not to be transformative in scope or scale, as they largely occur in the early stages of the causal chain. The effects of financial services on core economic and social poverty indicators are small and inconsistent. There is no evidence for meaningful behaviour-change outcomes. The effects on women's empowerment appear generally positive, but they depend upon programme features that are often peripheral to the financial service, and cultural and geographical context. Accessing savings opportunities has small but more consistently positive effects for poor people, and bears fewer downside risks for clients than credit. The inconsistent quality of the primary evidence base that formed the basis of their syntheses raises concerns about the reliability of the overall findings.

International policymakers prioritize financial stability and inclusion, but often view them as separate goals, overlooking potential overlap and trade-offs. If synergies and trade-offs between the two concepts are not recognized and understood, policy design may yield less-than-ideal results. This paper provides a systematic review of the theoretical literature on financial inclusion and financial stability as well as empirical research initiatives examining the relationship between the two concepts. We found that current studies do not always present a unified theoretical approach or conceptual framework to explain the channels of the relationship between financial inclusion and stability. Empirical studies to date offer divergent views on the financial inclusion and stability nexus. While some studies are inconclusive, some also suggest that financial inclusion has a positive and significant impact on financial stability, as explained by the institutional theory. While other studies, supported by the aggressive credit expansion theory, reveal that financial inclusion can have a negative influence on financial stability. Through this comprehensive review, we intend to improve awareness and cohesion among scholars and policy makers of financial inclusion and financial stability while also facilitating the development of solid foundations to address future research and policy making challenges.

On the Impact of Financial Inclusion on Financial Stability and Inequality: The Role of Macroprudential Policies

This study uses annual data over the period 2005-2014 and the Panel VECM approach to examine financial inclusion and monetary policy effectiveness in Africa. The study shows that financial inclusion and monetary policy effectiveness are linked by a set of long-run relationships. Policy reaction to the positive financial inclusion shock is not significant. Policy reaction to the positive money supply shock is statistically significant and positive in the short-run while reactions are not significantly different from zero in the long-run. On the other hand, the positive interest rate has a positive and statistically significant permanent effect on the level of monetary policy effectiveness. To various degrees, financial inclusion, money supply and interest rate shocks have some role in explaining variations in monetary policy effectiveness, but in the long-run, more than 45 percent of variations in policy effectiveness are explained by interest rate shocks. Moreover, there exists a one-way causality from monetary policy effectiveness to financial inclusion. This study establishes that financial inclusion is not a significant driver of monetary policy effectiveness in Africa. On the contrary, monetary policy effectiveness is the driver of financial inclusion. For increased financial inclusion in Africa, therefore, heightened effectiveness of monetary policy will be required.

PurposeThe study aims to find out the impact of financial inclusion and financial development on financial stability using panel data from eight countries in the Middle East and North Africa (MENA).Design/methodology/approachTo achieve the aim of the study, the researcher prepared two indicators of financial inclusion and governance to find out the impact of financial development on the relationship between financial inclusion and financial stability. Data on financial inclusion was obtained from the International Monetary Fund, data on financial development and financial stability were obtained from the World Bank.FindingsThe results of the fixed and random effect methods show that financial inclusion has a significant positive effect on financial stability. Additionally, financial development represents a moderating variable in the significant positive effect on the relationship between financial inclusion and stability in the MENA countries.Research limitations/implicationsThe current study suffers from some limitations that researchers must be aware of in future research. First, there is an inability to determine qualitative aspects such as time and cost when designing a composite indicator of financial inclusion. Second, due to limited data, we used only eight countries from the MENA. It is suggested to expand the sample to include other countries.Originality/valueThis paper contributes to the related literature between financial inclusion and financial stability by confirming or denying the results of previous studies. Also, to the best of the author’s knowledge, this paper is the only one that explains the role of financial development in the relationship between financial inclusion and stability in MENA countries, using a composite index to calculate financial inclusion. Finally, the study seeks to focus the attention of the government and policymakers to build a system of financial inclusion that leads to improving financial stability.

This article examines the existing synergy between financial inclusion and human development in Indian states during the post-liberalisation periods (1993–2015). Using both principal component analysis and panel data regression models, first, the impact of financial inclusion on human development is measured. Second, the reverse causality from human development to financial inclusion is estimated to know whether human development should be a pre-condition for ensuring greater financial inclusiveness in Indian states. It is found that financial inclusion has a positive and statistically significant impact on human development, along with other control variables such as social sector expenditure, per capita state gross domestic product and capital receipt. However, the lack of urbanisation (measured by the percentage of rural population) has a negative and significant impact on the process of human development in Indian states. On the other hand, since human development has also a significant reverse causal connection with financial inclusion, it is argued that ensuring financial inclusion through urbanisation measures would not only improve the level of human development in Indian states, but it would also sustain the process of inclusive development in itself due to the existing feedback loop with the later.

Financial inclusion has been one of the most debated areas of the development process in many developing countries, particularly in Sri Lanka, for many years but has not yet been adequately addressed. In Sri Lanka, there has been a gentle increase in the density of economic institutions since 1990. In line with the survey on GN divisions (2009/10), the common was 4.2 financial institutions per GN division. From time to time, there are some initiatives taken by the Central Bank regarding financial inclusion. Therefore, the purpose of this study is to analyse the relationship between financial inclusion and rural development. This study used the quantitative approach and secondary data, spanning annually from 1996 to 2019. The Autoregressive Distributed Lag (ARDL) model was performed to test the constructs' hypothesised relationship using the EViews 11 student version. According to the ARDL results, the study reports a positive relationship between financial inclusion and rural development. Cooperative banking as an institution plays an incredibly significant role in achieving the objective of a countless degree of financial inclusion in the country by bringing together people's resources with small means and providing them with access to different financial services. These banks provide the credit requirement of people with a limited resource mobilisation scope living in rural areas with considerably higher social responsibility. Cooperative banks may encourage modernisation by facilitating the dissemination of new technologies, mobilising self-help, and motivating people to use their self-help potential better. Thus, offering an economic future for rural youth in the country. Further, it revealed that despite the substantial improvement of rural development over the period from 1996 to 2019. It is expected that the findings of this study help various level policymakers to address the issues relating to rural development and financial inclusion from a novel and different perspective. Future studies may investigate the modernisation facilities considering what extent that help to improve the financial inclusion in the country and for the continued sustainable development in Sri Lanka as a whole.
 Keywords: Financial Inclusion, Rural Development, Sri Lanka