Relationship between financial inclusion and financial development in India: Is there any link?

Lenka, Sanjaya Kumar

doi:10.1002/pa.2722

Cited by 25 publications

(12 citation statements)

References 55 publications

(78 reference statements)

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“…According to Lenka (2021), the financial sector can be viewed in two ways: financial development and financial inclusion. Financial development aims to promote innovation and competition, making transactions in the financial sector more affordable (Hartmann et al, 2007).…”

Section: Understanding Financial Inclusionmentioning

confidence: 99%

Impact of Financial Inclusion on Economic Growth of African Countries

Kilimvi

Ezekwesiri²

2023

AJACC

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Purpose: The main objective of this study was to understand the effect of financial inclusion on economic growth of Africa. Although Africa is the second-most populous continent in the world with a 3.17% growth rate, it has the biggest proportion of the world's population without access to a bank, at a startling 45% throughout the continent. However, a growing number of Fintech businesses have emerged in Africa in recent years to address the issue of financial inclusion. With this advent, it was imperative to study the phenomenon and ascertain if there is any effect on the economy. Methodology: Descriptive and Correlational Research Design were employed to explain and examine the relationship between financial inclusion and economic growth. This study adopted the quantitative research approach. Secondary data from Financial Access Survey (FAS), World Development Indicators (WDI) and The Global Financial Index Report from 2015 – 2021 were examined. The relationships were tested using Generalized Moments Method (GMM) that was preferred over the Ordinary Least Square method (OLS) because of its efficiency and veracity to work with small samples. The data was presented in form of tables and graphs. Findings: The results showed that financial inclusion indicators are positively correlated to the economic growth. Using the dimensions of financial inclusion such as availability, penetration, and usage, we can ascertain a positive impact on the economic growth of Africa at large. Unique Contribution to Theory, Practice and Policy: The outcome of the study will guide policy makers to identify the most effective strategies to achieve financial inclusion that enhances economic growth. While previous studies identified ATM and CBB as one of the highest financial inclusion indicators that aid economic growth, it is recommended that BCB with a higher correlation be considered too for economic growth. Therefore, governments should focus on building structures and systems that encourage borrowing to stimulate economic growth.

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Section: Understanding Financial Inclusionmentioning

confidence: 99%

Impact of Financial Inclusion on Economic Growth of African Countries

Kilimvi

Ezekwesiri²

2023

AJACC

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“…From the Chinese stock market, Yang and He (2019) also concluded that financial innovation regulations had a positive impact on the financial market from 2008 to 2015. Lenka (2022) investigated the relationship between financial inclusion and financial development for the Indian economy from 1980 to 2017; results from the study showed a unidirectional causal relationship. This further promotes the view that financial inclusion plays an important role in the development of the financial sector.…”

Section: Literature Reviewmentioning

confidence: 99%

Regulatory policy uncertainty, banking industry innovations and financial development among emerging markets

Abaidoo,

Agyapong

2023

JFEP

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Purpose This study examines the extent to which regulatory policy uncertainty, macroeconomic risk, banking industry innovations, etc. influence variability in financial sector development among emerging economies in sub-Sahara Africa (SSA). Design/methodology/approach Data for the empirical inquiry were compiled from a sample of 25 economies from the subregion from 2010 to 2020. Empirical estimates examining the relationships noted above were carried out using the two-step system generalized method of moments estimation technique. Findings Results the empirical estimates suggest that regulatory policy uncertainty and macroeconomic risk adversely influence or constrain financial sector development among the economies examined in the study. Banking industry innovations on the other hand is found to positively influence the development of the financial sector in these economies. Furthermore, moderating empirical analysis suggests that effective governance positively moderates the relationship between banking industry innovations and financial development among economies in the subregion. Originality/value This study’s approach to the mechanics of financial development among economies in SSA is designed to offer different perspectives to those found in the existing literature on financial development in three fundamental ways. First, although the verification of the role of banking industry innovations in financial development may not be new, it is important to point out that the approach used in this study is based on an index for innovations with different constituents or principal components in its construction; making the variable significantly different from what has been examined in the literature. In addition, the review of regulatory policy uncertainty and macroeconomic risk (both variables are multifaceted constructs using the principal component analysis procedure) further brings into this study’s analysis, a different approach to examining conditions influencing variability in financial development among developing economies.

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“…The result of the analysis indicates that there is short-run causality running from commercial bank branches to human development index. Lenka (2021) investigates the linkages between financial inclusion and financial development in India from 1980 to 2017. The author used the principal component analysis methodology to construct both financial inclusion index and financial development index.…”

Section: Literature Reviewmentioning

confidence: 99%

Financial inclusion and sustainable development: an empirical association

Ozili¹

2022

JMB

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PurposeThis paper aims to investigate the association between financial inclusion and sustainable development in a global context.Design/methodology/approachThe study used two datasets, and employed the Pearson correlation analysis and granger causality test to examine the correlation and pairwise causality between financial inclusion and sustainable development.FindingsHigh levels of financial inclusion (in terms of higher commercial bank branches per 100,000 adults) is significantly associated with higher electricity production from renewable sources, higher industry productivity, higher adult literacy rate and higher renewable electricity output. Also, higher financial inclusion is significantly associated with low combustible renewables and waste. There is a uni-directional granger causality between global interest in internet information about sustainable development and global interest in internet information about financial inclusion, particularly in the period after the global financial crisis but before the COVID-19 pandemic.Practical implicationsThe correlation between financial inclusion and sustainable development depends on the indicators employed to measure financial inclusion and sustainable development. The results support global calls for greater financial inclusion and the speedy attainment of the sustainable development goals for the good of all people, the environment and for the planet.Originality/valueThis paper is the first study in the literature to analyze the link between financial inclusion and sustainable development using global data. This study contributes to the existing literature by investigating the association between financial inclusion and sustainable development in a global context.

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Relationship between financial inclusion and financial development in India: Is there any link?

Cited by 25 publications

References 55 publications

Impact of Financial Inclusion on Economic Growth of African Countries

Impact of Financial Inclusion on Economic Growth of African Countries

Regulatory policy uncertainty, banking industry innovations and financial development among emerging markets

Financial inclusion and sustainable development: an empirical association

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