Financial inclusion is a concept that promotes the accessibility and admittance of people and small businesses to financial assistance such as credit, banking features, and insurance items. There is a significant poof that adequate financial services have advantageous gains for women, young people, clients, and underprivileged individuals. Efficient and sound expansion of financial inclusion in emerging countries is frequently upheld by adequate strategies, innovative reforms, and favorable regulations that ought to help small firms, poor and marginalized individuals, and empower communities. Various emerging countries are executing reforms to extend financial diffusion. For that reason, this study will explore the factors that promote financial inclusion in emerging countries and the lessons that African countries could learn from them. Thus, 13 emerging countries which are (India, Saudi Arabia, Thailand, Malaysia, the Philippines, Singapore, Indonesia, Nigeria, Mexico, South Africa, Brazil, Russia, and China) from the period of 2005 to 2020 were nominated. Additionally, to determine the elements that influence financial inclusion factors such as bank branches per 100 000 individuals, net income per capita, percentage of individuals using the internet, gross domestic product, total employment, inflation, and population density were selected. A simple OLS and quantile regression model were performed in different percentiles. Furthermore, the findings exposed that variables such as national income per individual, the increase in internet usage, and inflation regulations promote financial inclusion in emerging countries. Whereas, employment displayed a negative effect with the OLS model. However, it presented a positive influence after performing the quantile regression. This implies at a larger scale the employment rate does have a positive impact on the availability of bank branches. Finally, population density presented a neutral effect on the availability of bank branches while the GDP of emerging countries exhibited a negative impact on the availability of bank branches for individuals.
Angrist, J. D., & Pischke, J. S. (2009). Mostly harmless econometrics: An empiricist’s companion. Princeton, NJ: Princeton University Press.
Central Bank of Kenya (2019).
Demirgüç-Kunt, A., & Klapper, L. F. (2012). Measuring financial inclusion: The global findex database. World bank policy research working paper, (6025).
Gujarati, D. N., & Porter, D. C. (2003). Basic econometrics (ed.). Singapore: McGrew Hill Book Co.
Karpowicz, M. I. (2014). Financial Inclusion, Growth, and Inequality: A Model Application to Colombia. IMF Working Papers WP/14/166.
Kempson, E., Perotti, V., & Scott, K. (2013). Measuring financial capability: A new instrument and results from low-and middle-income countries. International Bank for Reconstruction and Development World Bank.
Koenker, R., & Bassett Jr, G. (1978). Regression quantiles. Econometrica, 46, 33-50.
Lewis-Beck. (2015). Applied regression: An introduction (Vol. 22). Sage publications.
Maimbo, S. M., Faye, I., & Triki, T. (2011). Financing Africa Through the Crisis and Beyond. Washington, DC: World Bank.
Munyegera, G. K., & Matsumoto, T. (2016). Mobile money, remittances, and household welfare: panel evidence from rural Uganda. World Development, 79, pp.127-137.
Olaniyi, E. & Adeoye. (2016). Determinants of financial inclusion in Africa: A dynamic panel data approach. University of Mauritius Research Journal, 22, 310-336.
Roussel, P. (2019). Expert Eye: Overcoming Barriers to Financial Inclusion in Developing Countries | Industry Insights. Retrieved from: https://www.africaoutlookmag.com/industry-insights/article/1195-expert-eye-overcoming-barriers-to-financial-inclusion-in-developing-countries.
Reserve Bank of India (2020). Yes bank ltd. placed under moratorium. Retrieved from: https://www.yesbank.in/personal-banking/yes-individual/wealth-management/wealth-insights/economic-reports.
Sahay, M. R., von Allmen, M. U. E., Lahreche, M. A., Khera, P., Ogawa, M. S., Bazarbash, M., & Beaton, M. K. (2020). The Promise of Fintech: Financial Inclusion in the Post COVID-19 Era. IMF Departmental Paper (p. No. 20/09). Washington DC: International Monetary Fund, Washington.
Sanderson, A., Mutandwa, L., & Le Roux, P. (2018). A Review of Determinants of Financial Inclusion. International Journal of Economics and Financial Issues, 8(3), 1-8.
Tita, A. F., & Aziakpono, M. J. (2017). The effect of financial inclusion on welfare in sub-Saharan Africa: Evidence from Disaggregated Data. ERSA Working Paper 679.
Ulwodi, D. W., & Muriu, P. W. (2017). Barriers to financial inclusion in Sub-Saharan Africa. Journal of Economics and Sustainable Development, 8(14).
UN (2020). Micro, Small and Medium-sized Enterprises. Department of Economic and Social Affairs Sustainable Development.
Wenczel, O. (2021). The Potential of the Islamic Financial Industry and its Role in Promoting Education, Value Based Financing for Sustainable Development. Green and Social Economy Finance (1st ed., pp.102-111). CRC Press.
World Bank (2017). Annual report. Retrieved from: https://openknowledge.worldbank.org/handle/10986/29765
World Economic Forum (2020). How digital payments can help countries cope with COVID-19, other pandemics: Lessons from China.
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.