Abstract
Financial inclusion ensures financial products and services at reasonable rates for individuals and aims to introduce unbanked people into banking and financial services. The study aims to explore the effect that mobile banking facilities have on financial inclusion in 17 developing countries. From 2011 to 2017, this study took data from the three dimensions of financial inclusion called "Penetration," "Access," and "Uses". This paper took the Sarma model of Index of Financial Inclusion (IFI) to measure financial inclusion. This paper incorporates mobile money accounts as a "penetration" variable and Mobile banking outlet as an "Access" variable with existing model variables to quantify the effect of mobile banking. This research finds that mobile banking positively impacts the selected countries, though the degree of the changes is not symmetric. African regional countries have improved their financial inclusion after introducing mobile banking much better compared to other regions. This study is limited to examining mobile banking effects on selected emerging countries only. Future research may be devoted to developing more innovative strategies and tools to reach out to unbanked people, including people who face disparities in mobile phone ownership and bandwidth allocation.
Highlights
Financial inclusion has become a significant concern for economists, government, and researchers as there is a connection between the degree of financial inclusion and economic growth
This study investigates the impact of mobile banking on financial inclusion through the measurement of the Index of financial inclusion
This paper considered mobile banking as a tool for financial inclusion
Summary
Financial inclusion has become a significant concern for economists, government, and researchers as there is a connection between the degree of financial inclusion and economic growth. A country's economy develops through financial services, which help people fight poverty by encouraging business, health, and education investments. Dev (2006) defines financial inclusion as an effort to provide low-income and disadvantaged groups with a banking service at a reasonable minimum cost. Emerging countries should consider financial inclusion as business opportunities and social responsibilities. Financial inclusion helps improve living standards for underprivileged farmers, enterprises, and other disadvantaged groups (Dev, 2006). Financial inclusion is an idea of making and ensuring financial services accessible when required and ensuring that they are achievable with fairness and transparency at an affordable cost (Sameer, Chandrashekhar, Chakrabarty, & Phatak Deepak, 2009; UnitedNations, 2006). The financial inclusion concept is developed on the idea of availability, usage, and accessibility of financial services Demirguc-Kunt, Leora; Singer, Dorothe; Ansar, Saniya; Hess, Jake., 2018). Sameer et al (2009) describes that financial inclusion is no longer an option it is a compulsion
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