Financial Inclusion in Ukraine: Determinants and Evaluation

Abstract

The low level of coverage of the population by banking services is one of the relevant problem for the Ukrainian banking system and for the economy as a whole. The economic growth, the well-being of the population and the social climate in society depend from the ability of the population to the use of basic financial services. In the article the definition of financial inclusion of the population is considered and formed. The determinants of supply and demand, which are complemented by the determinants of social responsibility, are studied. This approach, together with the needs and accessibility of basic financial services, combines the protection of consumer rights, the development of proportional surveillance, the promotion of digital technology and the creation of financial literacy programs, taking into account national and sociological characteristics. The author’s proposed vision of the components of financial inclusion is related to well-being, awareness, accessibility, involvement and use. Their economic content, logical consistency and interconnectedness are disclosed. A set of analytical indicators has been formed, quantitatively characterizing them and integrated indexes have been constructed. On the basis of a composite consideration of all indices, a map of financial inclusion was constructed, which clearly shows that the population in Ukraine is not sufficiently oriented in the economy and financial sphere. The reasons for the low interest of the population in the use of banking services, among which the dominant ones are recognized: lack of funds, distrust of banking institutions, unacceptable pricing policy of banks. According to the statistics of the World Bank and the NBU, the coverage of the population of Ukraine with basic financial services is analyzed in comparison with other countries. It is determined that in order to increase the level of financial inclusion, it is necessary to ensure that the basic financial services of those part of the population of the country who do not have access to them are covered.

Quality of life and financial inclusion in Bogota: A predictive analysis through machine learning

“…https://doi.org/10.56294/sctconf2023430 En Ucrania, la baja calidad en la cobertura de los servicios financieros afecta significativamente la economía del país. La investigación sugiere que el bienestar social y el crecimiento económico están vinculados al acceso y al uso de servicios financieros, y que los obstáculos principales son los ingresos ineficientes y la desconfianza en las instituciones financieras (Prymostka et al, 2020).…”

The level of financial inclusion in Ukraine: Measuring access, quality, and usage of financial products and services

“…They concluded that although the financial inclusion of the Ukrainian economy corresponds to the global average level, the financial inclusion level in Ukraine lags significantly behind the indicators of highly developed countries. Prymostka et al (2020), in their attempt to assess financial inclusion in Ukraine, used indicators calculated by the World Bank, which allowed them to compare the domestic level of financial inclusion with the levels in Poland, Georgia, Belarus and the Czech Republic in 2014 and 2017. The authors outlined that, in general, "the level of financial inclusion is growing, except the tendency to save, which indicates a low level of confidence in the banking system" (Prymostka et al, 2020, p. 507).…”

Does the Quality of Institutions Matter for Financial Inclusion? Cross Country Evidence

“…One important gap in the ‗access to finance' strand of literature which has been less analysed, is the influence of institutions on financial inclusion. While existing literature has mainly focused on distrust of banks (Prymostka et al, 2020), the role of branch network expansion & bank charges, (Allen et al, 2016), mobile account penetration (Beck et al, 2015;William & Suri, 2014), culture (Lu et al, 2021), gender (Girón et al, 2021;Khmous & Besim, 2020;Aterido et al, 2013), population density (Cá mara & Tuesta, 2015) income, education, industrialization, employment (Dar & Ahmed, 2020;Mhlanga et al, 2020), financial literacy (Grohmann & Menkhoff, 2018), financial innovation (Beck et al, 2015), regulation (Beck et al, 2010) as the drivers of financial inclusion, this study contributes to the existing literature by examining the role of institutional quality on financial inclusion across developed and developing countries.…”