Financial Inclusion

IMF Working Papers, 2020

The past two decades have seen a rapid increase in interest in financial inclusion, both from policymakers and researchers. This paper surveys the main findings from the literature, documenting the trends over time and gaps that have arisen across regions, income levels, and gender, among others. It points out that structural, as well as policy-related, factors, such as encouraging banking competition or channeling government payments through bank accounts, play an important role, and describes the potential macro and microeconomic benefits that can be derived from greater financial inclusion. It argues that policy should aim to identify and reduce frictions holding back financial inclusion, rather than targeting specific levels of inclusion. Finally, it suggests areas for future research.

Humanities & Social Sciences Reviews, 2020

Purpose of the study: This paper tries to review the existing literature on financial inclusion and to discuss the various definitions of financial inclusion, its diverse dimensions comprehensively - demand side and supply side - and multiple explanatory variables (economic, demographic, behavioural, and social factors) to explain the level of financial inclusion. Methodology: From various databases and e-journals, the papers were retrieved on the topic of financial inclusion during the time span of the last 15 years (2005-2019). After reading the abstract of totally collected 140 research papers, the researchers have chosen 84 articles for the present study based on the relevance of the content to the topic under study. The collected information was classified as per the major themes. Main Findings: Much research has been conducted on the measurement and impact assessment of financial inclusion, But the studies on the explanatory variables are comparatively fewer. Among the various...

Forum for Social Economics, 2020

This paper provides a comprehensive review of the recent evidence on financial inclusion from all regions of the World. It identifies the emerging themes in the financial inclusion literature as well as some controversy in policy circles regarding financial inclusion. In particular, I draw attention to some issues such as optimal financial inclusion, extreme financial inclusion, how financial inclusion can transmit systemic risk to the formal financial sector, and whether financial inclusion and exclusion are pro-cyclical with changes in the economic cycle. The key findings in this review indicate that financial inclusion affects, and is influenced by, the level of financial innovation, poverty levels, the stability of the financial sector, the state of the economy, financial literacy, and regulatory frameworks which differ across countries. Finally, the issues discussed in this paper opens up several avenues for future research

Social Science Research Network, 2021

This paper highlights the globally-important determinants of financial inclusion. The determinants identified in this paper are formal account ownership; demand for formal savings; demand for formal borrowing; financial literacy and education; debit and credit card usage; the need to receive remittances from family and friends; size of the financial system; number of automated teller machines (ATMs); number of bank branches; proximity to a bank; availability and access to mobile phones; availability of digital financial products and services; technology infrastructure; government policy; culture and traditional belief systems; national financial inclusion strategy and implementation; and direct legislation.

Financial Internet Quarterly, 2021

This paper highlights the globally-important determinants of financial inclusion. The determi-nants identified in this paper are formal account ownership; demand for formal savings; demand for formal borrowing; financial literacy and education; debit and credit card usage; the need to receive remittances from family and friends; size of the financial system; number of automated teller machines (ATMs); number of bank branches; proximity to a bank; availability and access to mobile phones; availability of digital financial products and services; technology infrastructure; government policy; culture and traditional belief systems; national financial inclusion strategy and implementation; and direct legislation.

This paper presents some policy ideas on how to achieve high levels of financial inclusion. It explores a number of policy options that can be used to achieve greater levels of financial inclusion. The paper argues that high levels of financial inclusion can be achieved by reducing interest rate; introducing conditional low interest rate; supporting monetary policies with welfare payments; reducing taxes; using targeted government spending; supporting fiscal policies with tax rebate, tax holiday or tax exemption; grant tax rebate to financial institutions; financial inclusion-environment decoupling; and de-risking the financial system.

Edward Elgar Publishing eBooks, 2021

There are many reasons why financial inclusion is important in a country: it has implications for economic development and the economy and society more generally, it often requires public policy initiatives, and it may impact on the efficiency, structure and stability of the national financial system. There is also the issue of the extent to which the structure of the financial system (such as between financial institutions and markets, and the relative role of foreign versus indigenous banks) has an impact on financial inclusion. The World Bank has adopted Universal Finance Access, which outlined the objective that everyone should have access to at least a basic bank account by the year 2020. While financial access has been advancing globally for several years, the World Bank estimated that in 2017 this still left around 1.7 billion adults unbanked (World Bank, 2018). For recent surveys of some of the key issues in financial inclusion, see Beck and de la Torre (2017), Barajas et al. (2020), Claessens (2005) and Carbo et al. (2005). The most comprehensive data set (the Global Findex Database) is produced and regularly updated by the World Bank. An important issue for society is the extent to which all households and firms have access to the products and services provided in the financial system and the degree to which some agents are excluded from some or all of these products and services. This is an issue for both developing and developed economies, though the focus in this volume is predominantly on the former. The economic, social and individual costs of financial exclusion can be substantial, with many studies indicating that it can have a negative impact on a country's economic development. This raises the question of what can be done by governments, regulators, financial firms and educators to address the costs of financial exclusion. There is also the issue of the extent to which new and emerging technology has the potential to impact on financial exclusion in both positive and negative ways. The International Monetary Fund (IMF) collects detailed granular data on access to, and use of, financial services, including digital finance, in its regularly updated Financial Access Survey (IMF, 2020). The World Bank's

Staff Discussion Notes, 2015

DISCLAIMER: Staff Discussion Notes (SDNs) showcase policy-related analysis and research being developed by IMF staff members and are published to elicit comments and to encourage debate. The views expressed in Staff Discussion Notes are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Banking services should be available to the entire population of the economy without discrimination. However, in India, banks have not been able to cover many segments of our population since long. Financial inclusion is delivering financial services at affordable costs to disadvantaged and low income segments of society. The Indian Government has been making hard efforts to expand financial inclusion. Though many improvements have been made in areas related to financial viability, profitability and competitiveness, still vast segments, especially the underprivileged sections of the society, have not accessed basic banking services. In recent years, many developing countries have taken initiatives to expand financial services for the poor. Some country strategies have given successful results which can be lessons and learning for other countries to emulate and expand financial inclusion. This paper, through an extensive review of international research on financial inclusion, highlights the best practices that can be borrowed from these nations to boost financial inclusion in India.

Ghana Journal of Development Studies, 2017

This study attempts to review the extant literature on financial inclusion, financial development innovation and monetary policy. It surveys literature between 2007 and 2015 and identifies key themes in this field of study, methodologies adopted, geographical distribution of the studies and synthesises these to identify relevant gaps and direction for future research. The study makes very intetersting finding. Common areas of study can be categorised as determinants, effects and evaluation of these concepts. Areas for discussions have focused on financial inclusion and its implications for monetary policy and financial stability. The linkage between financial inclusion and monetary policy has been studied in few instances and through models that estimate a direct relationship. Studies that estimate models which examine the mediating role of financial development and innovation on the impact of financial inclusion on monetary policy are yet to be done. Researchers have mostly modeled that, growth in financial innovation, financial development and financial inclusion on their own, do individually enhance growth in total factor productivity. These studies however do not explore the possible mediating effects of these factors on another in maximising their effects. Innovation can stir up financial inclusion through the availability of various products that either transfer or mitigate the risk of providing financial services to the unbanked. However, while innovation directly spurs financial inclusion effectively, how this relationship is affected at different levels of financial development is yet to be established. Literature has documented various ways in which increased financial inclusion could be beneficial for financial stability, but it is yet to be explored how sensitive this effect could be at different levels of financial depth. These are the gaps the study identifies and recommends to be filled by furture research. The study futher recommends that empirical examination of the effect of financial development on the relationship between financial