Financial Inclusion: Can it Meet Multiple Macroeconomic Goals?

Sahay, Ratna; Čihák, Martin; N’Diaye, Papa; Barajas, Adolfo; Mitra, Srobona; Kyobe, Annette J; Mooi, Yen N; Yousefi, Reza

doi:10.5089/9781513585154.006

Cited by 254 publications

(215 citation statements)

References 8 publications

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“…High level of financial inclusion in a country assists the positive improvements such as the increase in the activities of small enterprises, the faster and healthier growth of the country's economy, the control of inflation, the increase of employment, the increase of the welfare level of the people, the increase of the living standards of the poor, the decrease of income inequality, the obtainment of financial development and financial stability and improving resistant of the financial system to shocks (refer to, e.g. Swamy, ; Burgess & Pande, ; Levine, ; Menon, Rodgers, & Vender, ; Mehrotra & Yetman, ; Mbutor & Uba, ; Ray & Prabu, ; Lenka & Bairwa, ; Sahay et al, ). Because of its importance, financial inclusion has created a global awareness and gained a growing reputation as a policy objective in the sight of policy makers and governments.…”

Section: Introductionmentioning

confidence: 99%

“…shocks (refer to, e.g. Swamy, 2014;Burgess & Pande, 2005;Levine, 2005;Menon, Rodgers, & Vender, 2011;Mehrotra & Yetman, 2015;Mbutor & Uba, 2013;Ray & Prabu, 2013;Lenka & Bairwa, 2016;Sahay et al, 2015). Because of its importance, financial inclusion has created a global awareness and gained a growing reputation as a policy objective in the sight of policy makers and governments.…”

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confidence: 99%

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Spatial Determinants of Financial Inclusion over Time

Bozkurt

Karakuş

YILDIZ

2018

J of Intl Development

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This paper investigates the factors generating changes in the financial inclusion levels based on data from 120 countries for 2011 and 2014. After calculating the index of financial inclusion across countries, we find evidences on the presence of spatial dependencies by using the Global Moran's I and local indicators of spatial association analyses. Then, we employ spatial regression and spatial panel data models that control for spatial interdependence. The results show that social, banking and political factors play an important role in the determination of change in financial inclusion. We also find financial inclusion convergence among the countries. Copyright © 2018 John Wiley & Sons, Ltd.

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Section: Introductionmentioning

confidence: 99%

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confidence: 99%

Spatial Determinants of Financial Inclusion over Time

Bozkurt

Karakuş

YILDIZ

2018

J of Intl Development

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“…Using cross-country data, Sahay et al (2015) observed a negative impact of financial inclusion on financial stability. Authors argued that without having proper supervision, when credit is expanded to all, it will increase the risk of financial stability.…”

Section: Previous Empirical Studiesmentioning

confidence: 99%

Does Financial Inclusion Induce Financial Stability? Evidence from Cross-country Analysis

Siddik¹,

Kabiraj²

2018

AABFJ

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In recent times, financial inclusion and financial stability issue have become a priority on policy agendas across the world. However, there is relative dearth of empirical studies addressing and establishing the link between the same. This study fills this gap. Using panel data of 2001-2013, this study empirically investigated whether financial inclusion contributes to country's financial stability, measured by Z-score. Robust results from GMM dynamic panel data estimator show that financial inclusion variables as measured by number of SME borrowers to total borrowers and ratio of outstanding SME loans to total loans have significant positive contributions to financial stability. Findings also indicate that GDP per capita, liquidity, proportion of private credit to GDP are positively and proportion of domestic credit provided to private sector and financial crisis are negatively associated with financial stability. Empirical findings of this study is of greater significance to the policymakers as it will invoke the attention of governments and policymakers to undertake such policies to accelerate financial inclusion of their countries which in turn will lead to country's greater financial stability. This study also contributes to empirical literatures of the issue of financial inclusion and financial stability by reconfirming (or otherwise) findings of previous studies. KeywordsFinancial stability, financial inclusion, financial openness, GMM dynamic panel estimator, robustness. AbstractIn recent times, financial inclusion and financial stability issue have become a priority on policy agendas across the world. However, there is relative dearth of empirical studies addressing and establishing the link between the same. This study fills this gap. Using panel data of 2001-2013, this study empirically investigated whether financial inclusion contributes to country's financial stability, measured by Z-score. Robust results from GMM dynamic panel data estimator show that financial inclusion variables as measured by number of SME borrowers to total borrowers and ratio of outstanding SME loans to total loans have significant positive contributions to financial stability. Findings also indicate that GDP per capita, liquidity, proportion of private credit to GDP are positively and proportion of domestic credit provided to private sector and financial crisis are negatively associated with financial stability. Empirical findings of this study is of greater significance to the policymakers as it will invoke the attention of governments and policymakers to undertake such policies to accelerate financial inclusion of their countries which in turn will lead to country's greater financial stability. This study also contributes to empirical literatures of the issue of financial inclusion and financial stability by reconfirming (or otherwise) findings of previous studies.JEL Classification: G21, G28, O16.

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“…In terms of monetary and financial policy, the IMF suggests that both advanced and developing countries should strengthen financial access and inclusion, along with efficiency, depth and stability, to reduce income inequality and poverty. 23 Some research also indicates that expansionary monetary policy and liberalization of the financial sector have been bad for equality by largely benefiting the wealthy (Annex 1).…”

Section: Economic and Gender Inequalities Are Bad For Growthmentioning

confidence: 99%

Great Expectations: Is the IMF turning words into action on inequality?

Mariotti¹,

Galasso²,

Daar³

2017

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For decades, the IMF imposed policy conditions on countries which worsened economic inequality. However, today the IMF has an inequality agenda that calls for action to tackle the inequality crisis. What is the IMF doing in practice to operationalize that agenda? The IMF's main initiative has been a series of pilots that integrate inequality analysis into its economic surveillance of countries. Oxfam's evaluation of these pilots finds they are not promoting policies that reduce inequality. 4 3. The IMF should also insist that country authorities set clear targets to reduce inequality, to be agreed with citizens, as part of their medium-term development plans and in line with their commitments under SDG 10.

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Financial Inclusion: Can it Meet Multiple Macroeconomic Goals?

Cited by 254 publications

References 8 publications

Spatial Determinants of Financial Inclusion over Time

Spatial Determinants of Financial Inclusion over Time

Does Financial Inclusion Induce Financial Stability? Evidence from Cross-country Analysis

Great Expectations: Is the IMF turning words into action on inequality?

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