Do Financial Inclusion Indicators Affect Banks’ Profitability? Evidence from Selected Arab Countries

Obeid, Rami

doi:10.2139/ssrn.4214730

Cited by 7 publications

(5 citation statements)

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“…The results concur with the findings of Fadi ( 2021), Kumar et al ( 2021), Kinyua and Omagwa (2020), Ojwang andOtinga (2019), Nkuna et al (2018) that the number of bank branches influences the level of financial performance of deposit money banks. However, the study disagrees with the findings of Al-Eitan et al ( 2022), Jouini (2021) that the number of branches of deposit money banks negatively affects the level of bank performance.…”

Section: Deposits By Customers and Financial Performancecontrasting

confidence: 99%

Financial Inclusion and Financial Performance of Deposit Money Banks in Nigeria

Appah¹,

S.F.²

2023

African Journal of Accounting and Financial Research

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This study investigated the relationship between financial inclusion and financial performance of deposit money banks in Nigeria from 2011 to 2021. The specific objectives were to investigate the relationship between customers loan and return on assets of deposit money banks in Nigeria; determine the relationship between customers deposit and return on assets of deposit money banks in Nigeria; evaluate the relationship between bank branches spread and return on assets of deposit money banks in Nigeria; ascertain the relationship between online banking and return on assets of deposit money banks in Nigeria; and investigate the relationship between agent banking and return on assets of deposit money banks in Nigeria. The study employed ex post facto and correlation research design with secondary data obtained from the Central Bank of Nigeria and financial institutions of deposit money banks. The population of the study consisted of all listed deposit money banks and a sample size of ten (10) was employed for data analyzing using univariate, bivariate and multivariate analysis. The results indicated a positive and significant relationship between loans to customers, deposits by customers, bank branches, mobile banking and agency banking on return on assets of deposit money banks. The study concluded that financial inclusion positively influences the level of financial performance of deposit money banks. On the basis of the conclusion, the paper recommended amongst others that financial inclusion innovation methods should be stressed in the financial sector through Central Bank of Nigeria (CBN) regulatory and advisories since it leads to improved financial performance and efficiency. In addition, the study also recommends that deposit money banks in Nigeria should invest more on agency, internet banking and ATM services to include the excluded people in financial services and products throughout the country since they provide significant influence on the financial performance of deposit money banks.

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Section: Deposits By Customers and Financial Performancecontrasting

confidence: 99%

Financial Inclusion and Financial Performance of Deposit Money Banks in Nigeria

Appah¹,

S.F.²

2023

African Journal of Accounting and Financial Research

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“…On the other hand, the performance of banks has a positive and signifi cant eff ect on fi nancial inclusion, i.e., profi tability of the fi nancial institutions signifi cantly contributes to fi nancial service expansion across the SSA countries, and thereby fi nancial inclusion. This result is consistent with the fi ndings of other scholars who found a positive and signifi cant relationship between fi nancial inclusion and profi tability (Jouini, 2021). Commercial banks share profi ts while competition rises in the markets, and hence increase their fi nancial service quality and quantity to obtain extra profi ts through credit expansion and this fact can increase fi nancial inclusion, which may lead to fi nancial instability (Mengistu and Saiz, 2018).…”

Section: Determinants Of Financial Inclusion -Empirical Findingssupporting

confidence: 91%

Determinants of Sustainable Financial Inclusion in Sub-Saharan Africa: A System GMM Approach

Demie Jima,

Lindelwa Makoni

2023

Prague Economic Papers

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There is no consensus on the key drivers of financial inclusion due to variation in the socioeconomic features of countries, use of indicators and research methods. The main objective of this study is, therefore, to empirically examine the key drivers of financial inclusion across 26 selected Sub-Saharan African (SSA) economies for the period between 2000 and 2019, using a system generalized method of moments (GMM). A principal component analysis (PCA) is applied to construct a composite index of financial inclusion to address the multi-dimensional nature of the variable. The findings of the study indicate that both the macroeconomic and microeconomic factors influence the level of financial inclusion of the SSA countries. Specifically, the lag effect, economic growth, financial stability, inflation, financial deepening, liquidity, profitability, and bank efficiency are important drivers of financial inclusion in the SSA region.It is therefore important for policy makers and regulators to consider these factors while developing policies and strategies that foster access to financial products and services and ensure financial inclusion in the region.

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“…Ahamed and Mallick (2019) demonstrate that the presence of bank branches in areas with a higher concentration of unbanked individuals and businesses enables a better understanding of their requirements, thereby reducing default risk and non-performing loans and boosting bank earnings. Jouini et al (2021) investigate the relationship between the financial inclusion and the return on assets ratio for the Arab region during the period (2013-2019), the study does not find any significant effects of the distribution of ATMs and the number of bank branches on the return on assets. Kumar et al (2021), determine the relationship between financial inclusion and profitability of banking sector in Japan during the period from 2004 to 2018.…”

Section: Introductionmentioning

confidence: 89%

Factors Affecting Return on Assets (ROA) in the Banking Sector of Selected Arab Countries: Is There a Role for Financial Inclusion and Technology Indicators?

Obeid¹

2023

IJEF

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The objective of this study is to examine, using a dynamic panel data framework, the effects of financial inclusion on the performance of the banking sector, as measured by the return on assets, for eleven Arab countries during the period 2012-2019. In addition to financial inclusion and technologies indicators, our analysis incorporates banking and macroeconomic variables. The study reveals that bank-specific variables have a greater impact on the profitability of banks than macroeconomic variables. The results show that there is a positive and significant impact of the bank’s assets, the bank solvency, the credit growth, the economic growth rate, and the inflation rate on the profitability of the banking sector. However, the return on assets is unaffected by fluctuations in nonperforming loans and the interbank lending rate. Regarding indicators of financial inclusion and technologies, the study finds no evidence of significant effects of automated teller machines (ATM) distribution and bank branch density on return on assets.

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Do Financial Inclusion Indicators Affect Banks’ Profitability? Evidence from Selected Arab Countries

Cited by 7 publications

References 0 publications

Financial Inclusion and Financial Performance of Deposit Money Banks in Nigeria

Financial Inclusion and Financial Performance of Deposit Money Banks in Nigeria

Determinants of Sustainable Financial Inclusion in Sub-Saharan Africa: A System GMM Approach

Factors Affecting Return on Assets (ROA) in the Banking Sector of Selected Arab Countries: Is There a Role for Financial Inclusion and Technology Indicators?

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