Role Of Financial Inclusion Research Articles

The role of financial inclusion and technological innovation in stimulating environmental sustainability in the European countries: A new perspective based on load capacity factor

Given the alarming level of climate change, policymakers across the globe are seeking strategies to mitigate environmental pollution to achieve sustainable development. In this context, renewable energy and technological advancements have emerged as an effective way to lower pollution and attain sustainable development. This study evaluates the effect of financial inclusion, technological innovation, and renewable energy on the load capacity factor (LCF) in European countries from 2004 to 2018. LCF is considered the most comprehensive indicator of ecological sustainability, combining both the biocapacity factor and ecological footprint. Hence, the present work fills the literature gap by exploring, for the first time, the effect of financial inclusion on the LCF. Applying the advanced Method of Moment Quantile Regression (MMQR), the study demonstrates that technological innovation and economic growth have adverse effects on LCF while renewable energy and financial inclusion promote LCF. The study indicates that technological innovation and economic growth undermine ecological excellence in European nations while green energy and financial inclusion enhance it. Moreover, the findings of the causality analysis reveal a causal association between financial inclusion, renewable energy, and LCF. Our study recommends prioritizing financial inclusion alongside investments in renewable energy to enhance ecological sustainability.

A comparative model for financial advisory standardization in Nigeria and sub-Saharan Africa

The development of a theoretical model for harmonizing local and international product standards for Nigerian exports Financial inclusion remains a significant challenge in Nigeria and across Sub-Saharan Africa, with millions of individuals, particularly in rural areas, lacking access to formal financial systems. Financial advisory services play a critical role in addressing this challenge by helping individuals understand and effectively use financial products such as savings, credit, and investments. However, the lack of standardization in the delivery of these advisory services has hindered their effectiveness, resulting in inconsistent practices and limited reach, especially among the unbanked population. This review proposes a comparative model for the standardization of financial advisory services in Nigeria and other Sub-Saharan African countries. It seeks to examine the current landscape of financial advisory services, comparing Nigeria’s approach with successful models in countries such as Kenya, Ghana, and South Africa. The model emphasizes key components of standardization, including financial literacy programs, digital advisory platforms, and microfinance initiatives, which are critical to reaching underserved communities. By analyzing case studies, such as Kenya’s M-Pesa platform, which has significantly advanced financial inclusion through mobile money and advisory services, the review identifies best practices that can be adapted to Nigeria’s context. The comparative analysis highlights the importance of leveraging technology, particularly mobile platforms, to provide accessible and scalable financial advisory services. It also underscores the need for public-private partnerships, regulatory support, and tailored programs that address the unique socioeconomic and cultural characteristics of Nigeria and other Sub-Saharan countries. While digital infrastructure remains a challenge in rural areas, the success of mobile banking and advisory platforms in countries like Ghana demonstrates that technology can play a transformative role in financial inclusion. Challenges such as cultural resistance, economic disparities, and infrastructure gaps are discussed, emphasizing the need for a flexible yet standardized approach to advisory services. Additionally, the review outlines the critical role of regulatory frameworks in ensuring that financial advisory services are consistent, transparent, and accessible to all segments of the population. The review advocates for a standardized advisory model tailored to Nigeria’s specific needs, drawing lessons from successful models across Sub-Saharan Africa. Such standardization, supported by regulatory reforms and technology integration, has the potential to bridge the financial inclusion gap, empowering individuals and fostering economic growth. The review also calls for regional collaboration in Sub-Saharan Africa to promote knowledge-sharing and create unified strategies for advancing financial inclusion across the continent.

The role of financial inclusion in expanding the tax base

The research aims to demonstrate the impact of implementing financial inclusion of the tax base, by imposing a tax on users of digital activities represented by social media platforms (content owners) through an applied study to know the mechanism of operation of these platforms, the extent of their influence, the profit mechanism achieved from them, and analyzing the data using the Excel program. The applied results have concluded that the scope of tax registration for these activities contributes to increasing the state's tax base, as more taxes are collected from various sources and the coverage of taxable activities increases. This affects supplementing the state's general budget through its reliance on sources other than oil to support it. Budget, and this is what the government is heading towards at this stage.

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.

Security tokens, ecosystems and financial inclusion: Islamic perspectives

PurposeShariah-compliant security tokens can play an important role in developing innovative solutions to resolve voluntary and involuntary financial exclusion in Muslim societies. This paper aims to present features of Shariah-compliant security tokens and supporting ecosystems that can provide additional sources of financing for small and medium enterprises (SMEs) and create alternative investment opportunities for retail investors.Design/methodology/approachThis conceptual paper presents the building blocks of security tokens, their ecosystem and key functions and activities and then examines these features from Islamic perspectives. This is done by reviewing the contemporary literature on cryptoassets and their ecosystems and analysing these in light of Islamic legal and ethical values and principles.FindingsThe paper provides a framework of how Shariah-compliant asset- and equity-based security tokens can be used by SMEs to raise funds quickly and efficiently on crypto exchanges. Given the novelty and complexity of the technology involved and the lack of understanding and skills to develop blockchain-based systems among SMEs, this paper suggests developing security tokens and exchanges in a controlled manner under the supervision of a nation’s stock markets.Originality/valueAlthough several studies examine cryptocurrencies from Islamic perspectives, literature on other cryptoassets and their role in financial inclusion is scant. This paper identifies Shariah-compliant asset- and equity-based security tokens and supporting ecosystems that can contribute to the development of digital capital markets where SMEs can raise funds efficiently and retail investors can invest in alternative asset classes.

The role of financial inclusion and tourism in tackling environmental challenges of industrialization and energy consumption: Redesigning Sustainable Development Goals policies

AbstractThe Next 11 (N‐11) countries are facing many challenges in achieving the objectives of Sustainable Development Goals (SDGs), as preserving environmental quality has become a major challenge for them. Specifically, achieving SDG 3, SDG 7, SDG 9, and SDG 13, the current research scrutinizes the influence of industrialization, tourism, and renewable and fossil fuel energy consumption with the moderating role of financial development on the ecological footprint in the N‐11 countries during 1995–2018. By testing all nine hypotheses through the augmented mean group, common correlated effects mean group estimators, and the Dumitrescu and Hurlin causality approach, various interesting findings are discovered. The findings verified that industrialization, tourism, and non‐renewable energy play major roles in driving environmental pollution. However, renewables and financial development increase environmental quality. Moreover, the interacting role of financial expansion with industrialization and non‐renewables significantly deteriorates the environment. In contrast, the moderating role of financial development with tourism and renewable energy protects environmental excellence. In addition, the growth hypothesis is discovered from tourism and renewables to ecological footprint, and the feedback hypothesis is discovered between industrialization, financial development, and ecological footprint. Following the empirical findings, we recommend several policy implications to address the objectives of SDG 3, SDG 7, SDG 9, and SDG 13.

Building Resilient Communities: Financial Inclusion as a Pillar of Sustainable Education (SDG 4)

"Financial inclusion and sustainable education are closely linked, especially in achieving SDG 4. The introduction highlights how financial inclusion can empower communities and promote inclusive education. It emphasizes universal access to affordable financial services as a catalyst for social mobility and economic empowerment. The role of financial inclusion as a pillar of sustainable education is then examined, highlighting its contribution to access, lifelong learning, educational infrastructure, financial literacy, and the empowerment of marginalized groups. Challenges related to SDG 4 and financial inclusion are discussed, including the digital divide, quality of education, financial literacy, inequality, and climate change. Opportunities at the intersection of SDG 4 and financial inclusion are identified, such as technological innovations, public-private partnerships, financial education integration, inclusive financing models, data analytics, empowerment of marginalized groups, and capacity building. Finally, the findings underscore the importance of integrating financial inclusion initiatives into education policies and programs to build resilient communities and promote inclusive and equitable education. The paper concludes by emphasizing the transformative potential of financial inclusion in fostering sustainable development and lasting progress for all."

The role of financial inclusion, urbanization, and energy efficiency on environmental performance in belt and roads initiative (BRI) economies

The primary objective of the study is to determine how environmental performance is affected by several factors, including trade freedom, industrial production, urbanization, financial inclusion, and energy efficiency. This research provides a novel perspective on the environmental performance of Belt and Roads Initiatives (BRI) member states by employing panel data from 1991 to 2021. It contributes to our understanding of the role of several factors in improving environmental performance. Panel data analysis also incorporates the CD, CIPS, FMOLS, DOLS, and PMG-ARDL tests. This research possesses substantial theoretical ramifications, as it might enable the expansion and refinement of current economic and environmental theories. As per the findings of this research, each factor significantly affects environmental performance (ecological foot-point). This contributes to short-term environmental issues by conserving resources and lowering emissions, creating the framework for long-term environmentally friendly procedures and innovation. Strong environmental policies that may cause effective environmental performance in Belt and Roads Initiatives (BRI) countries.

Analyzing the geographic influence of financial inclusion on illicit drug use in Nigeria

Nigeria grapples with a formidable public health concern, as approximately 14 million individuals partake in illicit drug use (IDU). This predicament significantly impacts psychiatric disorders, suicides, disability, and mortality rates. Despite previous investigations into predictors and remedies, the role of financial inclusion (FI) remains inadequately explored. Leveraging existing literature on FI and population health, this study asserts that bolstering FI could be instrumental in mitigating IDU prevalence in Nigeria. We employ spatial analysis to scrutinize the influence of FI and other social factors on IDU, revealing a 14.4 % national prevalence with spatial variations ranging from 7 % in Jigawa state to 33 % in Lagos state. Significant IDU hotspots were identified in the southwest states, while cold spots were observed in the Federal Capital Territory and Nassarawa. Multivariate spatial analysis indicates that FI, income, unemployment, and the proportion of the young population are pivotal predictors of IDU nationwide, explaining approximately 67 % of the spatial variance. Given these findings, the study advocates heightened levels of FI and underscores the need for intensified government initiatives to prevent and address illicit drug use.

Financial expenditure, financial friction, and coal consumption for energy efficient environment: Role of financial inclusion

This research investigates the crucial role that adaptability and ongoing evaluation have in implementing sustainable energy and economic development strategies in China. It emphasises the need for collaboration between enterprises, governmental organisations, and academic institutions in order to achieve these goals. The study also discusses how financial inclusion impacts economic growth and stability and how energy-intensive companies might use the Logarithmic Mean Divisia Index (LMDI) approach to evaluate energy decomposition. The findings indicate that different provinces in China’s high energy-intensive (EI) economic sectors have different degrees of energy efficiency, with certain regions possibly having inefficiencies. The research underscores the need for targeted strategies to address these inefficiencies and disseminate efficacious approaches in new settings. The research also offers useful data that may be used to promote sustainable energy consumption and economic growth, with implications for policy-making and strategic initiatives. In summary, this paper presents specific policy recommendations and highlights the need for ongoing evaluation and collaboration to support China’s sustainable energy initiatives and economic growth.

Institutions and economic growth: the role of financial inclusion, public spending on education and the military

PurposeThe paper aims to investigate the relationship between institutions and economic growth in developing countries, considering the role of financial inclusion, education spending and military spending.Design/methodology/approachThe study employs dynamic panel analysis, specifically two-step system generalized method of moments (GMM), on a sample of 61 developing countries over the period 2009–2020.FindingsThe results confirm that weak institutional quality, weak financial inclusion and increased military spending are barriers to economic growth, conversely, increased spending on education and gross capital formation contribute to economic growth in developing countries. Regarding the specific institutional factor, we find that corruption, ineffective government, voice and accountability and weak rule of law contribute negatively to growth.Practical implicationsThe study calls for strengthening institutions so that the financial system supports economic growth and suggests increasing spending on education to improve access to and the quality of human capital, which is an important determinant of economic growth.Originality/valueThe study contributes to scarce literature by empirically analyzing the relationship between institutions and economic growth by considering the role of financial inclusion, public spending on education and military spending, factors that have been ignored in previous studies. In addition, the study identifies the institutional dimension that contributes to reduced economic growth in developing countries.

Effect of Capital Structure on Financial and Social Performance of Indian MFIs: A Bibliometric Analysis and Systematic Literature Review

Microfinance Institutions (MFIs) play a crucial role in financial inclusion and social empowerment, with funding sources significantly influencing their overall performance. Despite existing research efforts on the relationship between capital structure and the performance of MFIs, a notable gap remains in the literature, particularly concerning Indian MFIs. This study aims to address this void by examining the influence of capital structure on the financial and social performance of Indian MFIs. The study aims to assess the effect of capital structure on financial and social performance through a systematic literature review of 20 articles using Scopus and Google Scholar. Network analysis and systematic literature review methodologies, employing tools such as Bibliometrix and VOSviewer, were used to scrutinize the selected records. Findings reveal inconclusive outcomes on the effect of capital structure on MFIs' performance, specifically in the heterogeneous context of India, highlighting that while Indian MFIs utilize debt financing to expand services, it may elevate credit risk and non-performing assets, negatively impacting overall performance. The empirical results can guide MFIs in optimizing their capital structures for financial self-sufficiency, enabling better services for underserved populations. The study underscores the need for more empirical analyses, incorporating additional variables and a broader range of MFIs, to enhance reliability and provide actionable recommendations for financing structures and diversified funding sources.

Consumption of clean and dirty cooking fuels in ghanaian households: The role of financial inclusion

Home cooking is considered an important activity which promotes healthier lives, sustenance, and binds families and people together. Despite the benefits of home cooking, it is the leading source of household air pollution and its associated health risks particularly for developing countries including Ghana. The role of financial inclusion in facilitating the achievement of the Sustainable Development Goals (SDGs) of the United Nations is explored in this study for clean cooking technologies (i.e., SDG 7). The proposed study is based on three datasets from the Ghana Statistical Service (GSS), comprising of Ghana Living Standard Survey (GLSS) round 6, round 7 and the pooled form. Using distance to the nearest financial institution as instrument, the study employed probit two-stage least squares to investigate the heterogenous impacts of financial inclusion on household cooking fuels in Ghana. The findings show that financial inclusion increases the consumption of clean cooking fuel but reduces dirty fuels such as firewood, charcoal, kerosene etc. Female-headed households were found to be more impacted by financial inclusion over time than their male counterparts. The results also showed that financially included rural households reduced their consumption of dirty cooking fuels than their urban counterparts. These findings have important policy implications.

The dynamic nexus between agricultural productivity and renewable energy consumption in BRICS: the role of financial inclusion and foreign direct investment

PurposeThis study aims to examine the impact of renewable energy consumption on agricultural productivity while accounting for the effect of financial inclusion and foreign direct investment in Brazil, Russia, India, China and South Africa (BRICS) countries during 2000–2020.Design/methodology/approachThe study has used the latest data from World Bank and International Monetary Fund databases. The dependent variable in the study is agricultural productivity. Renewable energy consumption, carbon emissions, financial inclusion and foreign direct investment are independent variables. Autoregressive distributed lag (ARDL) approach was used to examine the short-run and long-run impact of renewable energy consumption, carbon emissions, foreign direct investment and financial inclusion on agricultural productivity.FindingsThe findings imply that consumption of renewable energy, carbon emissions and foreign direct investment have a positive impact on agricultural productivity while financial inclusion in terms of access does not seem to have any significant impact on agricultural productivity. Providing farmers, access to financial services can be beneficial, but its usage holds more importance in impacting rural outcomes. The problem lies in the fact that there is still a gap between access and usage of financial services.Research limitations/implicationsPolicymakers should encourage the increase in the usage of renewable energy and become less reliant on non-renewable energy sources which will eventually help in tackling the problems associated with climate change as well as enhance agricultural productivity.Originality/valueMost of the earlier studies were based on tabular analysis without any empirical base to establish the causal relationship between determinants of agricultural productivity and renewable energy consumption. These studies were also limited to a few regions. The study is one of its kind in exploring the severity of various factors that determine agricultural productivity in the context of emerging economies like BRICS while accounting for the effect of financial inclusion and foreign direct investment.

Revisiting the relation between financial inclusion and economic growth: a global analysis using panel threshold regression

This study revisits the relationship between financial inclusion and economic growth using data from 153 countries. Despite the extensive discourse on the role of financial inclusion in spurring economic growth, empirical evidence presents mixed outcomes. Financial inclusion, measured as account ownership at a financial institution or with a mobile-money-service provider, is pivotal to integrating the unbanked population into the economic mainstream, fostering inclusive economic growth. Our analysis demonstrates that the relationship exhibits positive yet varying effects across different thresholds of financial development. Thus, while financial inclusion consistently correlates with economic growth, the magnitude and impact of this relationship vary between countries at different levels of financial development, highlighting the importance of the tailoring of financial inclusion policies to consider the specific developmental stage of the financial sector. Results also reveal that the effects of financial inclusion and financial development vary across income groups and regions, and with regard to economic fragility.

Forecasting Financial Inclusion and Its Impacts on Poverty and Inequality: A Comparative Study in ASEAN

Financial inclusion has played a vital role in eradicating poverty and inequality in some developing countries over the last few decades. In ASEAN, the growth of financial inclusion is so rapid that it reaches every element of society. Therefore, the purpose of this study is to examine forecasts of financial inclusion, poverty, and inequality in ASEAN. In addition, the study also analyzes the correlation between financial inclusion, poverty, and inequality in ASEAN. The study uses the ARIMA and GMM models for the study period from 2000 to 2022. Projections show that most ASEAN countries have experienced an increase in the long-term financial inclusion index, with Thailand leading the ranking, followed by Malaysia. However, the role of financial inclusion in poverty does not seem to be so significant in the short term, most likely due to the still-difficult access for low-income groups.

Financial expenditure, financial friction, and coal consumption for energy efficient environment: Role of financial inclusion

This research investigates the crucial role that adaptability and ongoing evaluation have in implementing sustainable energy and economic development strategies in China. It emphasises the need for collaboration between enterprises, governmental organisations, and academic institutions in order to achieve these goals. The study also discusses how financial inclusion impacts economic growth and stability and how energy-intensive companies might use the Logarithmic Mean Divisia Index (LMDI) approach to evaluate energy decomposition. The findings indicate that different provinces in China’s high energy-intensive (EI) economic sectors have different degrees of energy efficiency, with certain regions possibly having inefficiencies. The research underscores the need for targeted strategies to address these inefficiencies and disseminate efficacious approaches in new settings. The research also offers useful data that may be used to promote sustainable energy consumption and economic growth, with implications for policy-making and strategic initiatives. In summary, this paper presents specific policy recommendations and highlights the need for ongoing evaluation and collaboration to support China’s sustainable energy initiatives and economic growth.

Financial Inclusion in post COVID scenario: A case study of Pakistan

The world is shifting from conventional, time-consuming ways of transaction to the world of mobile phones where they can make all their transactions with easy access, cost-effective, and sustainable ways. In Pakistan after 2008 state banks regularized branchless banking. The purpose of this study is to analyze the trend of mobile money in the last six years’ time period. The research uses quarterly data from 2015-2020 related to factors impacting mobile financial inclusion in Pakistan like mobile wallet transactions, over the counter transactions, total transaction value and volume, average daily transactions, mobile money accounts and usage segmented by gender, active accounts, agent data, and deposit amounts. We have analyzed that the trend of mobile money has increased in the last six years’ time period. The volume of mobile money in different provinces of Pakistan and Pakistan as a whole is increased. On the other hand, both males and females have an active role in financial inclusion. Though the ratio of the female is relatively low as compared to the men but overall, both have a significant role towards mobile money.

Role of financial inclusion and digital transformation on bank credit risk

As a result of information asymmetry, banks have generated many non-performing loans, jeopardizing financial stability. This paper investigates the relationship between digital transformation and credit risk and whether financial inclusion plays an interactive role. The paper employs the Generalized Method of Moments (GMM) and data from 116 Chinese banks from 2014 to 2021 to investigate the issue. The results show that digital transformation significantly and dynamically reduces bank credit risks, and inclusive finance plays an interactive role. As financial inclusion increases, this risk-reducing effect will increase, meaning that banks need to combine financial inclusion to promote bank risk reduction better and maximize risk assessment accuracy.

The role of financial inclusion in enhancing banking performance: An analytical study at Rafidain bank

The role of financial inclusion in enhancing banking performance: An analytical study at Rafidain bank