Relationships Between Financial Inclusion and Financial Stability and Economic Growth—The Opportunity or Threat for Monetary Policy?

Frączek, Bożena

doi:10.1007/978-3-030-16045-6_13

Cited by 6 publications

(3 citation statements)

References 18 publications

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“…Financial inclusion provides financial security to households, enhances the savings of individuals, and eventually leads to sustainable growth [21,38,42,64]. To make financial products and services affordable and accessible to adults, awareness of financial products, less restricted economic situation, and higher quality of government could play an important role in bringing the vulnerable society to the mainstream formal banking system.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Financial inclusion strategies may facilitate economies to achieve the United Nation's (UN) sustainable development goals (SDGs-2030). A strand of existing literature advocates that financial inclusiveness could mitigate the detrimental effects of poverty alleviation, income inequality, and financial instability in developing countries [21,28,38,42,50,64]. Although notable progress at the global level to increase account ownership 1 is made, still a large population is financially excluded [32], and regional disparity in inclusive development [25,26].…”

Section: Introductionmentioning

confidence: 99%

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Does strong governance stimulate the effect of economic freedom and financial literacy on financial inclusion? a cross-country evidence

2021

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This study examines the interlinkages between financial literacy, economic freedom, government quality, and financial inclusion using cross-sectional and panel data analysis. Using a sample of 98 countries from the year 2007 to 2018, OLS and system GMM estimators were used to analyze the results. The estimation results indicate that financial literacy and government quality positively influence financial inclusion. Results also find that governance quality strengthens the effect of financial literacy on financial inclusion. The results derived from the dynamic panel model also reasonably conclude the positive effect of economic freedom on financial inclusion while government quality acts as a catalyst for their link. Our results are also robust to sub-panels based on the level of country risk.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Does strong governance stimulate the effect of economic freedom and financial literacy on financial inclusion? a cross-country evidence

2021

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“…Researchers have found support in favor of both trade-off (Mehrotra and Yetman, 2015; Sahay et al , 2015a; Torre et al , 2012, 2013; Garcia, 2016) and synergy (Ahamed and Mallick, 2019; Prasad, 2010; Cull et al , 2012; Morgan, and Pontines, 2014; Han and Melecky, 2013; Hannig and Jansen, 2010) produced by financial inclusion. Increasing the number of financial institutions and introducing different kinds of complex credit and depository instruments through inclusive financial programs may carry both risks and benefits associated with the quality of the financial system (Frączek, 2019).…”

Section: Literature Reviewmentioning

confidence: 99%

Nexus of financial inclusion, competition, concentration and financial stability

Saha

Dutta

2020

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Purpose Since the strike of the 2007-2008 global financial crises, financial stability has been discussed with immense interest in academic and policy circles. Following this essence, this paper aims to investigate the nexus of financial inclusion, competition concentration and financial stability. Design/methodology/approach To analyze this relationship, this study uses different inclusion indices constructed by principle component analysis, Boon indicator, different concentration measures and Z-score, for a sample of 92 countries and subsamples based on income and economic grouping of those countries as well as for pre- and post-crisis episodes over the period of 2004-2014. This study also investigates the variation in inclusion–stability relationships in the presence of competition and concentration. This study uses two-step system-generalized method of moments (GMM) and two-stage least square to address the endogeneity. Findings The study finds that competition contributes to stability; however, there is evidence of fragility in the presence of concentration in the banking industry. Moreover, this study finds a U-shaped inclusion–stability relationship. The overall results of this study support the competition–stability view and a trade-off between inclusion and stability, which are consistent and robust to alternative econometric tests. Research limitations/implications Financial inclusion should be endorsed with caution in low-income, middle-income and emerging countries, and prudent policies should be taken to govern the market concentration to maintain financial stability. Originality/value To the best of the authors’ knowledge, this paper is the first to explain the impact of financial inclusion on financial stability in the presence of market heterogeneity.

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Financial Inclusion, Banking Sector Development, and Financial Stability in Africa

Anarfo

Ntuli

Boateng

et al. 2022

The Economics of Banking and Finance in Africa

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Relationships Between Financial Inclusion and Financial Stability and Economic Growth—The Opportunity or Threat for Monetary Policy?

Cited by 6 publications

References 18 publications

Does strong governance stimulate the effect of economic freedom and financial literacy on financial inclusion? a cross-country evidence

Does strong governance stimulate the effect of economic freedom and financial literacy on financial inclusion? a cross-country evidence

Nexus of financial inclusion, competition, concentration and financial stability

Financial Inclusion, Banking Sector Development, and Financial Stability in Africa

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