Impact of financial inclusion on economic growth in secular and religious countries

Ozili, Peterson K; Lay, Sok Heng; Syed, Aamir Aijaz

doi:10.1108/jfrc-08-2022-0093

Cited by 17 publications

(4 citation statements)

References 78 publications

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“…Other results revealed that domestic credit and financial development index contribute significantly to financial inclusion. In a similar review by Ozili, Lay, & Syed,. (2023) in some countries around the world, the result showed that financial inclusivity is influenced by financial stability and regulatory frameworks which differ across national boundaries.…”

Section: Statutory Reserve Requirementsmentioning

confidence: 93%

Monetary policy transmission tools and private sector performance – the Nigerian experience

Owen Affor Maku,

Gabriel Osakwe Ikediashi

2024

Int. j. adv. economics

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Credit to private sector is considered vital for the stimulation of domestic investment, job creation, economic growth, and general improvement in the standard of living of the people. This is because the economic activity in the private sector significantly complements governments’ efforts in attaining macroeconomic objectives, globally. However, as laudable as the benefits of credit to private sector has been in catalyzing private sector performance in developed economies, the situation in most transitioning economies, particularly, Nigeria has been far from satisfying. Several studies in academic literature have identified political instability, poor institutional framework, absence of fiscal transparency, macroeconomic factors and frequent policy changes as having significant constraining influences on credit availability in Nigeria with plausible recommendations to private sector performance. However, the absence of noticeable improvement over the years, and its accompanying growth-retarding multiplier effects on domestic investment and productivity in Nigeria has instigated more concentrated studies on the direct impact of monetary policy framework in the determination of the performance of private sector through credit availability. Therefore, this study empirically evaluates the impact of key monetary policy toolkits on the availability of private sector credits and performance in Nigeria. To this end, annual time series secondary data from 1993 to 2023 were sourced from National Bureau of Statistics and Central Bank of Nigeria Statistical Bulletins for various years within the study period. The study adopts Autoregressive Distributed Lag (ARDL) estimation technique after carrying out pre-diagnostic tests such as ADF unit root test and Bound Cointegration test. Our result reveals that money aggregates (MAG) is positive and significant in explaining variations in private sector credit and performance. Further results reveal that monetary policy rate (MPR), open market operations (OMO) and inflation rate (INR) impacted negatively on the performance of private sector in Nigeria within the study period. Therefore, the study concludes that the performance of the private sector in Nigeria will improve with increased credit availability, which is positively influenced by systematic increase in money aggregates and efficiently expanded monetary policy framework. The study recommends adoption of a harmonious blend of a more relaxed monetary policy framework with purposeful compliant-based regulation that will free up liquidity for increased private sector credits and performance. Keywords: Credit to Private Sector, Monetary Policy Rate, Open Market Operations and Money Aggregates.

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Section: Statutory Reserve Requirementsmentioning

confidence: 93%

Monetary policy transmission tools and private sector performance – the Nigerian experience

Owen Affor Maku,

Gabriel Osakwe Ikediashi

2024

Int. j. adv. economics

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“…Chaudhry et al (2023) also revealed positive effects of financial inclusion on economic growth in higher income OIC countries and opposite effects in lower income OIC countries. Ozili et al (2023) found that financial inclusion, through the expansion of bank branches and the use of the Internet contribute favorably to economic growth. Younas et al (2022) showed that financial inclusion has positive and significant effects on economic growth and the size of the shadow economy in developing countries reduces economic growth.…”

Section: Financial Inclusion and Economic Growthmentioning

confidence: 99%

“…(2023) also revealed positive effects of financial inclusion on economic growth in higher income OIC countries and opposite effects in lower income OIC countries. Ozili et al . (2023) found that financial inclusion, through the expansion of bank branches and the use of the Internet contribute favorably to economic growth.…”

Section: Study Background and Definition Of Research Hypothesesmentioning

confidence: 99%

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

Jungo

2024

REPS

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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.

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“…It is evident in the literature that religion affects the relationship between financial inclusion and economic development. Following Ozili et al (2023), we include religion in our specifications. The religion variable indicates the percentage of people who self‐identify as either atheistic or unaffiliated with religion.…”

Section: Data Descriptionmentioning

confidence: 99%

Does financial inclusion empower women in Africa?

Maruta,

Edjigu,

Kassa

2023

Economic Notes

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This paper examines the effect of financial inclusion on women's empowerment. We contribute to the growing interest in financial inclusion effectiveness literature by conducting an empirical analysis of 42 African countries to examine the role of financial inclusion in empowering women. We also examine and compare the effectiveness of the three dimensions of financial inclusion viz. usage, access, and quality, and the first most influential indicators, based on their PCA score, of these dimensions. Our findings suggest that financial inclusion has a significantly positive effect on women's empowerment‐measured by females' human development index. Examining the relative importance of financial inclusion dimensions, we find access to financial services has a higher effect on women's empowerment. These results are robust to alternative measures of women's empowerment and financial inclusion, and alternative estimation procedures. We also find that the effect of financial inclusion on women's empowerment is higher in low and lower‐middle‐income countries compared with upper‐middle‐income countries in the region. This study provides evidence of one of the channels through which financial inclusion contributes to reducing gender inequality, and thereby enhancing economic development.

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Impact of financial inclusion on economic growth in secular and religious countries

Cited by 17 publications

References 78 publications

Monetary policy transmission tools and private sector performance – the Nigerian experience

Monetary policy transmission tools and private sector performance – the Nigerian experience

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

Does financial inclusion empower women in Africa?

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