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

2021 ◽  
Author(s):  
Sanjaya Kumar Lenka
Keyword(s):  
Financial Development ◽  
Financial Inclusion

scholarly journals Financial Inclusion in Developing Countries: Applying Financial Technology as a Panacea

2021 ◽  
pp. 42-60
Author(s):  
Araniyar Isukul ◽  
Ben Tantua
Keyword(s):  
Developing Countries ◽  
Financial Development ◽  
Low Income ◽  
Quantitative Methods ◽  
Cost Effective ◽  
Financial Inclusion ◽  
Viable Option ◽  
Policy Objective ◽  
Banking Business ◽  
Financial Technology

Traditional banking methods of addressing the problem of financial inclusion in developing countries is not working efficiently. As it is becoming obvious, opening operational and functional banking business offices in many developing countries is not a financially viable option. Banking offices need enormous amounts of resources, equipment and personnel to run efficiently. In most developing countries were low income is the norm rather than the exception, it is not possible to sustain a policy objective that employs the use of banking business offices to address the problem of financial inclusion. Such initiative could start out well, however the possibility of sustainability is called into question. Thus, whatever meaningful gains have been garnered from such policy will be reversed or lost overtime. This research employs the use of quantitative methods and it sets out to test whether the usage of financial technology has had any meaningful impact in improving financial inclusion in the developing countries selected in the study. The findings of the research reveal that financial technology offers the instrument, tools and mechanism for drive financial inclusion in ways traditional methods of banking cannot. Financial technology offers, cost effective and cheaper means of driving financial development. This research suggests that financial technology should be used as a means of driving financial development in developing countries as it offers a more sustainable and cost-effective solution to the problem of financial inclusion. Developing countries, should embrace, adopt and adapt financial technologies to address their financial development issues.

scholarly journals Bottlenecks to Financial Development, Financial Inclusion, and Microfinance: A Case Study of Mauritania

2020 ◽  
Vol 13 (10) ◽  
pp. 239
Author(s):  
Mohamedou Bouasria ◽  
Arvind Ashta ◽  
Zaka Ratsimalahelo
Keyword(s):  
Financial Development ◽  
Financial Services ◽  
Secondary Data ◽  
Financial Inclusion ◽  
Access To Credit ◽  
Expert Interview ◽  
Public Sector Employees ◽  
Components Analysis ◽  
Country People

The objective of the study was to enhance our knowledge on institutional bottlenecks for financial development, financial inclusion, and microfinance, using Mauritania as a case study. We used a mixed-methods’ methodology that combines analysis of secondary data and an expert interview. First, a logit model with dummy independent variables was used to investigate the factors that impact the households’ access to credit, the main advantage of this model being to avoid confounding effects by analyzing the association of all variables together. Our study found that access to financial services is equal in Mauritania between men and women, but that access to credit is higher for public sector employees, educated people, and households with smaller families. Second, using principal components’ analysis, we found that the different regions of Mauritania can be divided based on unemployment, income, literacy, financial inclusion, and population density into two main dimensions, yielding four quadrants: Attractive, industrious, moderate, and resource cursed. We expected that sparsely populated countries would have less access to credit. Counterintuitively, we found that within a low-density country, people in the lowest-density regions have higher odds of getting credit. Third, based on an interview with an expert, we noted the key challenges that microfinance is facing in Mauritania and provided recommendations to overcome these. As in most case studies, external validity was limited.

Financial sector development and income inequality in South Africa

2017 ◽  
Vol 8 (4) ◽  
pp. 420-432 ◽  
Author(s):  
Forget Mingiri Kapingura
Keyword(s):  
South Africa ◽  
Income Inequality ◽  
Financial Development ◽  
Empirical Studies ◽  
Financial Sector ◽  
Financial Inclusion ◽  
External Trade ◽  
Bounds Testing ◽  
Content Type ◽  
Financial Sector Development

Purpose The purpose of this paper is to examine the relationship between financial sector development and inequality in South Africa for the period from 1990 to 2012. Unlike previous studies, the study examines the role of both the broad measure of financial sector development (Bank credit to the private sector) and a measure of financial inclusion (ATMs). Design/methodology/approach Utilising quarterly data, the autoregressive distributed lag bounds testing model approach to cointegration test was estimated. The approach was preferred due to its compatibility with data of different orders and flexibility. Findings The findings indicate that financial development, especially when it is inclusive reduces the level of inequality in South Africa both in the short- and long-run. The results also highlighted that economic growth, external trade activities and government activities have played a very important role in reducing inequality in South Africa. On the other hand the empirical results also highlight that increasing inflation is regressive on inequality in South Africa. Research limitations/implications The results from the study imply that financial development on its own though important may not benefit the disadvantaged groups such as the poor and the rural community until it is inclusive. It is important to note that the study was carried out on the premise that inequality plays a very important role in exacerbating poverty levels in South Africa. Practical implications The paper highlights another avenue which authorities can pursue to reduce the level of inequality in the country. Social implications The paper documents the importance of financial inclusion in reducing the level of inequality in South Africa rather than advocating for financial sector development only. Originality/value The paper makes a contribution through analysing the effect of financial inclusion on income inequality rather than broad financial sector development which is common to the majority of the available empirical studies.

scholarly journals The African Financial Development and Financial Inclusion Gaps

2014 ◽  
Author(s):  
Franklin Allen ◽  
Elena Carletti ◽  
Robert Cull ◽  
Jun “QJ” Qian ◽  
Lemma Senbet ◽  
...  
Keyword(s):  
Financial Development ◽  
Financial Inclusion

FINANCIAL INCLUSION, INSTITUTIONAL QUALITY AND FINANCIAL DEVELOPMENT: EMPIRICAL EVIDENCE FROM OIC COUNTRIES

2021 ◽  
pp. 1-28
Author(s):  
MINHAJ ALI ◽  
MUHAMMAD IMRAN NAZIR ◽  
SHUJAHAT HAIDER HASHMI ◽  
WAJEEH ULLAH
Keyword(s):  
Financial Development ◽  
Method Of Moments ◽  
Positive Impact ◽  
Generalized Method Of Moments ◽  
Institutional Quality ◽  
Financial Inclusion ◽  
Moderation Effect ◽  
The Relationship ◽  
Unique Study

This unique study examines the moderation effect of institutional quality (IQ) on the relationship between financial inclusion (FI) and financial development (FD) of 45 Organization of Islamic Cooperation (OIC) countries. For empirical analysis, panel data are used for the period 2000–2016. We use the Arellano–Bond generalized method of moments (GMM) and two-stage least-squares (2SLS) method in our estimations to draw multidimensional results. The empirical results confirm the significant positive relationship between FI, IQ and FD. Interestingly, we find that IQ moderates FI and has a significant positive impact on FD. Our findings are robust to alternative econometric specifications of FI, IQ and FD. Therefore, policymakers must sensibly understand the pivotal role of FI and IQ in establishing sustainable future development of OIC countries.

Impact of Microfinance on Women Empowerment

2016 ◽  
Vol 5 (1) ◽  
Author(s):  
Jitendra S. Gandhi
Keyword(s):  
Literature Review ◽  
Financial Development ◽  
Financial Services ◽  
Human Life ◽  
Financial Inclusion ◽  
Quantitative Aspect ◽  
Women Empowerment ◽  
Poverty Eradication ◽  
Rural Finance ◽  
The Impact

Micro-finance has proved its importance in relation to poverty eradication, financial development, rural finance, banking and financial services in India. Though the India had philanthropic philosophy to help each other and grow together, micro-finance helped the same in a more institutional and organized manner. India is a diverse country in every aspect of human life which applies to its poverty too. Each region of India has its own language of poverty. Micro-finance also puts forward the movement of financial inclusion of women across the community. Micro-finance has come forward as a ray of hope for the women who are supposed to be equally participating in financial inclusion. The impact of micro-finance in the area of women empowerment in India is still neglected and less documented concept especially in the spectrum of research. The present article is an outcome of literature review which clearly indicates the impact of micro-finance movement in the process of women empowerment. The article has utilized qualitative as well as quantitative aspect to explore the impact of micro-finance in the process of women empowerment.

The State of Finance in Fragile States

2021 ◽  
pp. 186-208
Author(s):  
Adolfo Barajas ◽  
Ralph Chami ◽  
Connel Fullenkamp
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Financial Services ◽  
The State ◽  
Financial Inclusion ◽  
Significant Heterogeneity ◽  
Fragile States ◽  
The World Bank ◽  
Financial Depth ◽  
The World

This chapter describes the state of financial development in fragile states. Our analysis primarily relies on indicators from the World Bank Global Financial Development Database, which have been used extensively in the literature to capture the degree to which financial services and activities are present in an economy (depth) and the extent to which they are disseminated and made available to the population (inclusion). We find that financial depth in fragile states is underdeveloped and financial inclusion is low, but with significant heterogeneity among fragile states. We conduct empirical exercises which suggest that fragility is negatively related to financial development, both in terms of depth and especially in terms of inclusion, and exercises that also point to certain aspects of fragility most associated with financial underperformance. Finally, we use a benchmarking exercise to estimate how much financial underdevelopment in fragile states is costing them, in terms of economic growth.

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