The impact of financial depth on poverty in Egypt

Abstract

This study deals with the linkages between financial depth and poverty reduction in Egypt using data for the period of 1990-2015. The study applied last square method (OLS) to examine impact of financial depth on poverty reduction. The study depends, in expressing its dependent variable, which is the level of poverty, on two original variables: The poverty gap, and the percentage of the number of actual poor in the population, at the poverty line of $ 1.90 per day, according to 2011 purchasing power parity. As for the independent target variable we have which is Financial Development, the study will depend on three variables proxy to express On the level of financial development, in order to verify the robustness and reliability of the results, namely; Domestic credit to the private sector (% of GDP), and financial depository bank assets to GDP (%), in addition to bank credit for bank deposits (%). Our results show evidence of cointegration which confirms the presence of long run relationship between financial deepening, economic growth and poverty reduction.