FINANCIAL INCLUSION AND ECONOMIC DEVELOPMENT: A CROSS-COUNTRY ANALYSIS

Paper ID: EIJTEM_2021_8_4_18-25

Author's Name: CMA Niraj Prasad, Prof. Audhesh Tripathi, CMA Mayank Bajpai*

Volume: 8

Issue: 4

Year: 2021

Page No: 18-25

Abstract:

Financial inclusion, which is the process of accessing and properly utilizing formal financial services, is an important factor in powering economic development and poverty reduction. Study undertakes a broad cross-country analysis of financial inclusion and its impact on social and economic factors. Applying data from respectable bodies like World Bank, International Monetary Fund, Eurostat and United Nations Development Programme, the study applies regression analysis and fixed effects models to determine how income, employment, income inequality, urbanization and human development affect financial inclusion. The outcomes show the complicated interplay between these actors and financial inclusion over various national situations. Financial inclusion is becoming a key component of equitable economic development and poverty alleviation worldwide. The importance of financial inclusion is undisputed, but its causes must be identified. This research article uses a comprehensive cross-country analysis to explain how various civilizations utilize financial services. The study will examine the relationship between financial inclusion and its key socio-economic factors—income levels, employment dynamics, income inequality, urbanization trends, and human development—to inform inclusive economic development policymakers, researchers, and practitioners. The data demonstrates that financial inclusion promotes economic development by helping people save, invest, and manage risk. Additionally, academics have focused on socio-economic issues including income distribution, urban-rural divide, and education level in shaping financial inclusion patterns within and within nations. These characteristics' effects on financial literacy are yet unknown, thus more empirical study is needed to develop evidence-based policy. A 2004–2010 analysis uses data from the World Bank, International Monetary Fund, Eurostat, and United Nations Development Programme. The research examines how income, employment, income inequality, urbanization, and human development affect financial inclusion using regression and fixed effect models. The study neutralizes country-specific effects on financial inclusion to get strong findings across varied nations and regions.

Keywords: Financial inclusion, Economic development, Socio-economic factors, Regression analysis, Cross-country analysis.

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