Cross-country income variations and inclusive financing

Abstract

Purpose This study, a symposium, aims to explore the determinants of financial inclusion, impact of cross-country income-variations on financial inclusion, do high-income countries really uplift the financial inclusion and does the higher financial inclusion index indicate the larger economy? Design/methodology/approach This study adopts the panel data model to investigate the impact of high-income countries and low- and middle-income countries on financial inclusion. However, this study further adopts the principal component analysis rather than Sarma’s approach to calculate the financial inclusion index. Findings Based on the Data of World Bank, United Nations, International Monetary Fund, World Development Indicators, this study concludes that there is no nexus between income variations and financial inclusion, as the study reveals that some low- and middle-income countries have greater financial inclusion index such as Thailand (2.8538FII), Brazil (1.9526FII) and Turkey (0.8582FII). In low- and middle-income countries, the gross domestic product per capita, information technology and communication, the rule of law, age dependency ratio and urbanization have a noteworthy impact on financial inclusion that accumulatively describe the 83% of the model. Whereas, in high-income countries, merely, information technology and urbanization have a substantial influence on the growth of financial revolution and financial inclusion that describes the 70% of the total. Research limitations/implications The biggest limitation is the availability of data from different countries. Originality/value The originality of this paper is its technique, which is used in this paper to calculate the financial inclusion index. Furthermore, this study contributes to 40 different countries based on income, which could help to boost financial inclusion, and ultimately, it leads them toward economic growth.

The dynamics of the financial inclusion index for developing countries: lessons learned

“…From the seminal paper of Beck and De La Torre (2007) to the studies by Demirgüç-Kunt et al (2022) and Kumar (2013), research has found that financial inclusion entails access to and intensive use of financial services on a large scale by populations and businesses, regardless of their place of residence, at a low cost. Furthermore, while Sinclair (2001) and Safdar et al (2020) defined financial inclusion as access to mainstream financial services, for Sarma (2008), it is a set of arrangements that facilitate access to, availability of and use of financial services. It is in this vein that Amidžic et al (2014) and Sharma (2016) defined financial inclusion as an economic state in which individuals and firms are not denied access to basic financial services.…”

Revisiting long-run dynamics between financial inclusion and economic growth in developing nations: evidence from CS-ARDL approach

“…Few studies used first-generation econometric techniques to panel data. These studies ignored the dynamic nature, heterogeneity and cross-section dependency (Sharma, 2016; Sethi and Sethy, 2019; Kim et al , 2018; Safdar et al , 2020; Nandi et al , 2022). In addition, existing studies mostly used individual indicators of financial inclusion (Dar and Ahmed, 2021).…”

Financial savings structure—Eurozone and Visegrad Group

“…Another group of publications are articles related to determinants influencing changes in the structure of financial savings in households. The level of financial assets of households in different income groups are considered by among others Safdar, Lin, and Amin (2020) and Honohan (2006). The authors showed that differences in the structure of financial asset allocation depend on age, education and wealth.…”