Financial Inclusion Policies Research Articles

Digital Inclusive Finance Supports the Modernization of Agriculture Development

In the process of financial development, the high threshold and credit asymmetry not only increase the difficulty and cost of financing in rural agriculture, but also hinder the upgrading of agricultural industrial structure and delay the development of agricultural modernization. With the development of information technology and the wide application of big data, digital inclusive finance has become an important path and inevitable choice to promote the upgrading and modernization of China's agricultural industrial structure. The project intends to use the entropy method to measure the development level of agricultural modernization; Based on the two-way fixed effect model, the paper explores the effect of digital inclusive finance on agricultural modernization. With the help of the intermediary effect model, this paper explores the internal mechanism of the influence of the digital inclusive financial policy on the development of rural modernization from the level of "the upgrading of agricultural industrial structure". Based on the empirical results, this paper analyzes the heterogeneity of the effects of digital financial inclusion policies from the two dimensions of rural location and rural characteristics, and explores an effective path to promote digital financial inclusion and industrial upgrading in rural areas with prominent internal differences, with a view to providing reference and basis for the formulation and implementation of future digital financial inclusion and agricultural modernization development policies.

Financial inclusion and environmental pollution in sub-Saharan Africa: moderating effects of economic growth and renewable energy

A thriving literature exists about the role of financial inclusion in socio-economic development. Nevertheless, the environmental effects of financial inclusion are largely unknown in the literature, especially in sub-Saharan African countries. Therefore, this study explores the association between financial inclusion and CO2 emissions utilizing data from 23 sub-Saharan Africa for the period 2004–2019. Based on different estimation methods such as dynamic ordinary least squares (DOLS), fully modified ordinary least squares (FMOLS), canonical correlation regression (CCR), and an instrumental variable generalized-method of moment (IV-GMM), the results show that financial inclusion is responsible for a substantial increase in CO2 emissions. In addition, financial inclusion moderates economic growth, resulting in higher CO2 emissions. Alternatively, financial inclusion moderates renewable energy use to lower CO2 emissions. The outcomes also verify the presence of the Environmental Kuznets Curve hypothesis (EKC). This study proposes uniting financial inclusion and environmental policies as a strategy for reducing CO2 emissions in sub-Saharan Africa.

Parental financial inclusion and child proficiency in low-income settings: Family effects

Sustainable Development Goal 4 highlights universal education, yet in low-income economies, educational achievement levels, such as children's proficiency, often fall short of satisfactory standards. This study explores how family traits link parental financial inclusion to children's proficiency, using recent Ghana Living Standard Survey data 2016/2017 (round 7). Non-linear probit regression was employed, with standard errors corrected for both within cluster dependence and heteroscedasticity, yielding the following findings. This study highlights the connection between parents' financial inclusion and their children's proficiency levels, with outcomes varying based on family dynamics. Having bank accounts positively affects children's literacy, especially in households with educated mothers and male heads. Gender differences are notable in insurance and loan uptake, possibly reflecting different risk attitudes. The study recommends tailoring financial inclusion policies to accommodate family-specific traits.

Women-owned businesses and access to finance in Pakistan: a study of perceptions, experiences and behaviors

Purpose The purpose of this paper is to explore the perceptions, experiences and behaviors of women entrepreneurs and industry professionals in raising finance for women-led businesses and associated problems faced by the women entrepreneurs. Design/methodology/approach This qualitative research adopts a narrative inquiry strategy. In-depth interviews are used to collect data from women entrepreneurs and women industry professionals in Pakistan. NVivo qualitative data analysis software is used to organize, analyze and find insights in the qualitative data. Findings This research finds that women entrepreneurs struggle to secure financing for their businesses, and most of them have not been successful in obtaining loans from banks. Women entrepreneurs have relied on various sources of funding, including microfinance banks, grants, personal finance and family members. Some of the barriers to finance attainment for women entrepreneurs include sociocultural inhibitions, lack of awareness and limited information dissemination by financial institutions. Women professionals suggest that entrepreneurs should maintain a bank account, have proper documentation and show dedication to their business to improve their chances of obtaining financing. Research limitations/implications This research provides theoretical contributions and methodological advancements in the study of financial inclusion for women-owned businesses in Pakistan. This research raises awareness about the difficulties women entrepreneurs face when trying to obtain credit from banks and other financial institutions and provides policy recommendations to inform the government about financial inclusion policies and financing policies for women entrepreneurs. Overall, this research contributes to the literature on financial access and access to finance for women-owned businesses in developing countries. Originality/value Based on the vulnerable group theory and theory of discouraged borrower, this paper has two important theoretical and practical implications. First, the findings of this study reveal that the financial services are indifferent to women, and there is a denial of women being vulnerable in the financial system, hence requiring a major policy shift to not portray women as vulnerable, as they will rationally feel risky and prefer to opt out of the financial system. Second, the findings suggest that the issue of access to finance for women is not in the financial services but in the women's capabilities and awareness. Therefore, a policy shift is suggested from “financial services for women” to “capability and awareness of women” to avail and access the current services.

The impact of financial inclusion initiatives: Evidence from meta‐analysis

AbstractDeveloping an inclusive financial system is an important policy intervention to improve livelihood and reduce poverty. Despite this, the empirical evidence on the impacts of financial inclusion remains mixed. This study reports a meta‐analysis of studies on the impact of financial inclusion. The findings show that financial inclusion outcomes reflect small, positive and statistically significant average effects on consumption, income, asset and other poverty‐related indicators. The results of meta‐regression analysis also show that financial inclusion has a significant positive effect on household consumption. We discuss some of the sources of inconsistencies in financial inclusion studies, policy implications and future research directions.

Impact of financial inclusion on healthcare access: evidence from developing countries

PurposeThe aim of this study is to explore how financial inclusion can impact healthcare access in developing countries using panel data for the period 2004–2022.Design/methodology/approachTo check the impact of financial inclusion on healthcare access, the estimation techniques used are the fixed-effect model (FEM), two-stage least squares (2SLS) and the system generalized method of moments (GMM). The data were collected from different websites such as the World Development Indicators (WDI), the United Nations International Children's Emergency Fund (UNICEF) and the United Nations Educational, Scientific and Cultural Organization (UNESCO).FindingsIt is found in the study that financial inclusion has a significant positive effect on healthcare access, and it is also confirmed from previous literature results. The study found that if there are high financial services in the countries, healthcare sectors can be improved by timely facilities, care and funds. Proper development of financial services could be possible by conducting awareness initiatives, financial planning and implementing literacy programs to educate individuals, particularly in rural and underdeveloped areas. According to the results, trade openness and foreign direct investment have a positive impact on healthcare access, while urbanization has negatively influenced healthcare access.Research limitations/implicationsThe limitations of this study were restricted to only 29 developing countries. The main reason behind the lack of availability of data insurance data for developing countries was the limitation in generalizing the results.Practical implicationsThe government and policymakers must check what are the best financial inclusion programs and policies that can be implemented to improve healthcare access. Previous literature does not show visibly the impact of financial inclusion’s dimensions on healthcare access.Originality/valueThis study presents a pioneering examination of financial inclusion and healthcare in 29 lower- and middle-income countries (developing countries). This study has used a comprehensive financial inclusion index of 29 developing countries to cover the overall impact of financial inclusion on healthcare in these countries.

Sustainable financial inclusion in Nigeria: a need to go beyond access to impact

Purpose This paper aims to evaluate the processes and strategies of Nigerian banks towards achieving financial inclusion and offer recommendations for policies that can lead to effective and sustainable financial inclusion. Design/methodology/approach This paper conducts semi-structured interviews with senior executives of Nigerian banks to investigate their financial inclusion policies and practices. Findings This paper highlighted Nigerian banks’ views on dimensions that measure financial inclusion and found that they recognise that they play a pivotal role in providing access to formal financial services; however, their efforts to promote financial inclusion are provider-focused rather than customer-focused; they are keen to promote financial services usage; however, very little attention is paid to customer outcomes; financial inclusion is viewed as synonymous with access and innovations are not aiming for impact; and the sector is plagued with infrastructural challenges that breach service quality. Originality/value This paper reports on the practices of Nigerian banks towards financial inclusion and provides recommendations for rethinking sustainable financial inclusion. To date, this issue has not been investigated in the substantive literature. Nigeria is an ideal research site for examining financial inclusion. In recent years, the banking sector has made rapid strides in implementing policies to promote the adoption and usage of formal financial services. However, over half of the country’s adult population remains outside the formal financial system.

The nexus among digital financial inclusion, monetary policy transmission, and economic development in Sub-Saharan Africa

This paper aims to examine the complex relationship between digital financial inclusion, monetary policy transmission, and economic development in 18 Sub-Saharan African countries from 2004 to 2021. The study utilizes panel data and employs a digital financial inclusion index, broad money growth, and real gross domestic product per capita as proxies for digital financial inclusion, monetary policy transmission, and economic development, respectively. The panel autoregressive distributed lag model results uncover a bi-directional causality between economic development and digital financial inclusion, emphasizing the pivotal role of digital financial inclusion in fostering economic development. Additionally, another bi-directional causality between digital financial inclusion and monetary policy transmission highlights their interdependence. Unidirectional causality from monetary policy transmission to economic development is also established. This study emphasizes the crucial role of robust measures in enhancing digital financial inclusion to avert adverse consequences, offers nuanced insights into policy dynamics, particularly regarding inflation mitigation, and enhances monetary policy effectiveness. These findings underscore the importance of policy reform, legislation, and regulatory improvements to promote digital financial inclusion by Sub-Saharan African central banks. Strengthening rural financial infrastructure is crucial for driving digital financial inclusion, sustainable economic development, and reducing regional inequalities.

Mobile payment, digital inclusive finance, and residents' consumption behavior research.

Based on the data of multiple Chinese household finance surveys, the interactive relationship between mobile payment, inclusive digital finance, and household consumption is discussed. It is found that mobile payment can directly and effectively improve household consumption, and the impact on hedonistic and developmental consumption is greater than survival consumption, which is conducive to upgrading household consumption. At the same time, mobile payment can indirectly promote basic and developmental consumer spending through digital inclusive financial mechanisms and weaken hedonistic consumer spending. The heterogeneity analysis found that the impact of mobile payment on household consumption was affected by income level, dependency structure, and regional attributes, and the low-income and high-income groups benefited more significantly, and the consumption promotion effect in the eastern and central regions was greater than that in the western and northeastern regions. Further research finds that with the improvement of income status, the promotion effect of mobile payment on consumption shows a marginal decreasing trend. It is recommended to continue to promote the popularization and application of mobile payment, accelerate the matching of supply and demand in the consumer market, formulate financial inclusion policies according to local conditions, and form a good interaction mechanism between mobile payment, digital finance, and household consumption.

The effect of financial inclusion and economic integration on green growth in ASEAN

PurposeThis study was conducted to review the overview of green growth and examine the role of financial inclusion as well as economic integration and other variables on green growth in Association of Southeast Asian Nations (ASEAN) countries.Design/methodology/approachPrincipal component analysis (PCA) was used to construct financial inclusion variables and panel data regression analysis to examine the effect of financial inclusion and economic integration on green growth in 10 ASEAN countries from 2010 to 2021.FindingsThe results showed that financial inclusion had played a role in supporting green growth in ASEAN. The rapid development of green finance and green bonds promoted the implementation of better green growth. The variables of export diversification and trade openness had a significant effect on green growth. Therefore, there is a need for appropriate policies to prevent negative effects on the environment and the behavior of ASEAN countries.Research limitations/implicationsThe findings of this study suggest that policymakers in ASEAN countries not only focus on gaining economic benefits from financial inclusion and economic integration activities but also pay attention to environmental impacts. Moreover, the ASEAN region is actively developing strategic steps in providing easy access to capital and finance as well as expanding international trade activities through ASEAN Free Trade Area (AFTA). Therefore, it is hoped that apart from being able to establish sustainable policies, this region will also encourage and optimize previous policies to make them more environmentally friendly.Originality/valueThis study used a green growth approach with the Index by the Global Green Growth Institute. This index considered aspects of green economic opportunities and social inclusion that have not been applied in previous studies. In addition, this study contributed to review the activities of economic integration and financial inclusion and the sustainability of green growth in ASEAN countries. Until now, there has been no research focused on ASEAN; even though ASEAN has long carried out economic integration and encouraged financial inclusion policies, this region is vulnerable to environmental degradation issues.

Sustainable Development, Networks, Financial Inclusion, and Market Competitiveness: A Holistic View of Indonesian MSMEs

This research aims to analyze the influence of financial inclusion policies, network features and sustainable development strategies on the performance and market competitiveness of Micro, Small and Medium Enterprises (MSMEs) in Indonesia. The research was conducted using a quantitative approach involving 325 MSMEs from various industrial sectors. The analytical method used is Partial Least Squares (PLS) in Structural Equation Modeling (SEM) to test the correlation between variables. The research results show that there is a significant positive correlation between market competitiveness, financial inclusion, network features, sustainable development practices and the performance of MSME companies. The conclusion is that sustainable development practices, involvement in business networks, and access to financial services have a significant positive impact on market competitiveness and performance of MSME companies. The implication of these findings is the importance of integrating sustainability programs, encouraging business collaboration, and expanding financial inclusion to support sustainable growth and competitiveness of MSMEs in Indonesia. Keywords: Market Competitiveness, Network Characteristics, Financial Inclusion, Sustainable Development, MSMEs This research aims to analyze the influence of financial inclusion policies, network features and sustainable development strategies on the performance and market competitiveness of Micro, Small and Medium Enterprises (MSMEs) in Indonesia. The research was conducted using a quantitative approach involving 325 MSMEs from various industrial sectors. The analytical method used is Partial Least Squares (PLS) in Structural Equation Modeling (SEM) to test the correlation between variables. The research results show that there is a significant positive correlation between market competitiveness, financial inclusion, network features, sustainable development practices and the performance of MSME companies. The conclusion is that sustainable development practices, involvement in business networks, and access to financial services have a significant positive impact on market competitiveness and performance of MSME companies. The implication of these findings is the importance of integrating sustainability programs, encouraging business collaboration, and expanding financial inclusion to support sustainable growth and competitiveness of MSMEs in Indonesia. Keywords: Market Competitiveness, Network Characteristics, Financial Inclusion, Sustainable Development, MSMEs

The Impact of Financial Inclusion and Stability on Economic Growth in African Countries

This study investigates the effect of financial inclusion and financial stability on economic growth in a panel study of 30 African countries over the period between 2004 and 2020. Data were analyzed using the panel ARDL model. The panel ARDL estimation results demonstrate that financial inclusion has a statistically significant positive long-term effect on economic growth, though its short-term impact is insignificant. The study also found that the effects of financial inclusion on economic growth vary across different income levels. Specifically, there is a positive association in low-income countries, a negative association in lower-middle-income countries, and a positive but insignificant effect in upper-middle-income countries. On the other hand, the financial stability measured by the bank Z-score has a significant negative impact on long-run economic growth and a positive one in the short run. The effect is negative for low-income countries, positive for lower-middle-income countries, and negative but insignificant for upper-middle-income countries. Thus, the study findings suggest financial inclusion and financial stability policies should be tailored to the country's income level in African countries.

FINANCIAL INCLUSION AND INCOME INEQUALITY IN NIGERIA

Studies show that the low level of economic development in countries occasioned by high income inequality levels may be addressed by financial inclusion policies via providing increased access and availability of formal financial services to the financially excluded segment of the economy. This paper investigates the extent to which this is applicable in Nigeria using the Auto regressive distributed lag estimation technique on time series data for the period 1985 to 2019. The results, consistent with the special agent theory of financial inclusion, show that financial inclusion significantly reduce the income inequality gap in Nigeria. Furthermore, the results also suggest that education and economic growth lowers the gap while population widens the gap. Based on this, the study recommends that policy makers in Nigeria put in more efforts to achieve the set target rate of financial inclusion as well put in place population reducing polices to further reduce the gap while promoting policies that will actualise the potentials of the other indices.

Catalysing Financial Inclusion in South Africa's Rural Landscape: A Theoretical Discourse of PoS Business Model

In countries like South Africa, where cash plays a pivotal role in social and economic life, limited access to financial institutions, in rural areas has led to significant economic challenges for citizens and businesses. This limitation has further exacerbated the financial exclusion of the underserved population resonating with poor economic growth. In addressing the issue, this desktop-based theoretical discourse, draws on the Technology Acceptance Model, Schumpeterian Entrepreneurship Theory, and Circular Flow of Income Model to conceptualise cash point-of-sale business model, as an innovative mechanism with the potential to spearhead the country’s financial inclusion efforts, entrepreneurial imperatives and local economic participation. The findings provide valuable insights for policymakers and financial institutions to design and implement effective financial inclusion policies in rural areas. By addressing unique challenges faced by rural communities, such as limited infrastructure and lower levels of education, a more inclusive and resilient financial ecosystem can be achieved, contributing to broader social and economic development goals in South Africa's rural landscape. An exploratory empirical study is further recommended to pave the way for the development of a contextual framework to guide the model’s implementation in South Africa.

Research on the Impact of Digital Inclusive Finance on Green Innovation of SMEs

Green innovation is an effective driving force for high-quality development in the new era. As a new financial service model, digital inclusive finance provides a new way to solve the financing dilemma of green innovation. In order to investigate the impact of digital financial inclusion on the green innovation of small and medium-sized enterprises (SMEs), based on the panel data of SMEs in China from 2011 to 2021, this paper empirically tested the influence and mechanism of the two by using the panel fixed effect model and threshold regression model. The findings demonstrate that digital inclusive finance is effective in promoting the green innovation of SMEs and alleviates their financing constraints. The digitization level of digital inclusive finance also has a significant positive and non-linear effect of increasing “marginal effect” on the green innovation of SMEs. Notably, it has a greater significant role in driving green innovation for non-state-owned enterprises, enterprises located in the central and western regions, and SMEs with dispersed equity. Consequently, several policy implications are derived from these findings, which can provide a sustained impetus to help SMEs carry out green innovation activities and also provide a scientific basis for governments to improve digital financial inclusion policies and achieve economic equity.

Indicators of banks and economic indicators on non-cash payments in ASEAN-7 countries

This research explores the intricate relationship between digitalization, economic development, and non-cash payments in the ASEAN-7 countries over a ten-year period from 2011 to 2020. Focusing on factors such as commercial bank branches, broad money, and inflation, the study employs panel data regression analysis to investigate their impact on automated teller machine (ATM) usage. The findings reveal that commercial bank branches significantly influence ATM usage, emphasizing the role of accessibility, services, and technological preferences. Broad money also shows a significant impact on ATM transactions, reflecting the interplay between fund availability and non-cash transactions. However, inflation does not exhibit a direct influence on ATM usage. The research underscores the importance of maintaining service quality and security in the banking sector to enhance digital financial inclusion. Future research opportunities include exploring diverse non-cash payment methods and extending studies to countries with significant global economic impacts. This research contributes valuable insights to policymakers aiming to enhance digital financial inclusion policies, ultimately fostering economic growth through the digital economy in the ASEAN-7 region.

Financial inclusion, economic development, and inequality: Evidence from Brazil

We study a financial inclusion policy targeting Brazilian cities with low bank branch coverage using data on the universe of employees from 2000–2014. The policy leads to bank entry and to similar increases in both deposits and lending. It also fosters entrepreneurship, employment, and wage growth, especially for cities initially in banking deserts. These gains are not shared equally and instead increase with workers’ education, implying a substantial increase in wage inequality. The changes in inequality are concentrated in cities where the initial supply of skilled workers is low, indicating that talent scarcity can drive how financial development affects inequality.

A Study on the Status of Present Financial Inclusion Policy in the Districts of the State of West Bengal, India

Introduction: The convergence of financially excluded population towards mainstream formal financial institutions through proper accessibility, affordability and usage of services is crucial, to eradicate the dependence on informal money lenders, and to help the vulnerable and poor people to come out of the vicious debt cycle. As India aims to achieve inclusive growth, it has worked upon removing barriers from the path of gaining complete ‘Financial Inclusion (FI)’ through the policy called, Pradhan Mantri Jan Dhan Yojana (PMJDY). This has helped in translating Jan Dhan (wealth of people) to Jan Suraksha (security of people) through insurance and pension schemes, with the objective of building a global social security mechanism for every citizen. Objective: To analyse the status of the FI scheme (PMJDY) in the 23 districts of the state of West Bengal. Research Methodology: This research work will evaluate the effects of the current FI schemes, on the lives of the citizens of the state of West Bengal, which has 23 districts in total. To investigate about the inclusiveness in the financial system of those 23 districts, District FI Index (FII) has been developed, by considering some indicators for sub-indices as well as for composite index, that are clubbed under three dimensions, namely, accessibility, availability and usage of bank offerings. Earlier literature focused on savings and deposit accounts as a variable to compute FI whereas this study bridges the gap and considers only PMJDY scheme-based accounts to evaluate the present status of the scheme in the state. Findings and Conclusion: It is observed that Kolkata has secured the highest place in FII whereas other districts have shown relatively low FI. The state still has a long distance to travel in terms of achieving a complete FI but it has the capability of travelling at a faster rate due to well-developed banking infrastructure. Thus, to make the FI scheme effective, a developed and accessible banking structure is a pre-requisite. The success of this scheme in bringing the deprived and vulnerable section into the fold will not only increase savings and investment but also contribute to strengthening the human capital of the country.

Inklusi Keuangan Dalam Hubungannya Dengan Pertumbuhan UMKM Dan Tingkat Kesejahteraan Masyarakat Di Palangkaraya, Kalteng

This research explores the impact of financial inclusion on the growth of Micro, Small and Medium Enterprises (MSMEs) in Central Kalimantan, Indonesia, during the 2011-2021 period. Data analysis shows an increase in financial services account ownership from 20% to 52%, contributing to economic growth and a decrease in the unemployment rate. This study highlights the role of government policy in promoting access to financial and supporting services for MSMEs, which is crucial in developing local economies and social welfare. The implications of these findings recommend strengthening financial inclusion policies and increasing support for MSMEs to optimize economic growth and expand employment opportunities in Central Kalimantan.

Financial inclusion and monetary policy targets: Evidence from the ECOWAS countries

The study examines the impact of financial inclusion on monetary policy targets in the Economic Community of West African States for the period between 2004 and 2020. To capture how a shock to financial inclusion affects monetary policy targets in the ECOWAS sub-region, the study employs panel vector autoregression via the Generalized Method of Moments framework and uses the impulse response functions. The results show that in all ECOWAS countries, financial inclusion leads to an appreciation of the local currency, thereby improving the value of the exchange rate. However, it reduces the effectiveness of monetary policy. In particular, financial inclusion increases consumer prices and interest rates. Based on the findings, the study recommends, among others, the need for a single monetary policy in the ECOWAS sub-region to properly integrate its monetary policy framework in line with the economic and monetary integration policy of the West African Monetary Zone.