Does Private Sector Development Decrease Financial Inclusion? An Evidence In A Transitioning Country

The relationship between financial innovation and financial inclusion remains an underexplored area in economic research, despite ongoing debates about the interconnectedness of these two critical factors. Financial innovation, characterized by the development and adoption of new financial products, services, and technologies, has the potential to significantly enhance financial inclusion by improving access, affordability, and convenience of financial services. However, empirical evidence on how these innovations directly influence the extent and quality of financial inclusion across different economies, particularly among the G20 countries, is limited. This study examines the relationship between financial innovation and financial inclusion within the context of G20 countries. To attain the objective, the paper constructs a Financial Inclusion Index (FII) to provide a comprehensive view of financial inclusion. Similarly, the Financial Innovation is measured using a financial innovation index computed by means of internet accessibility and mobile accessibility by following PCA method. In pursuit of the study's goals, it utilizes secondary data spanning from 2014 to 2022, which was obtained from the World Bank and the IMF Financial Access Survey (FAS). The findings reveal a significant relationship between financial inclusion and innovation among the G20 nations. The result also reveals that financial innovation positively impacts financial inclusion. However, the findings are limited to examining the nexus between financial inclusion and financial innovation within selected G20 countries. As an original contribution to the field, this research encompasses various dimensions that previous authors have considered. This study addresses this gap by examining the empirical nexus between financial innovation and financial inclusion, aiming to provide insights into how technological advancements shape financial accessibility and inclusion outcomes in diverse economic contexts.

The present study develops a Financial Inclusion (FI) index and extends an interlinkage between FI and Economic Growth (EG). The study is the first to develop an FI index created for the main trading nations from 2001-2019 based on financial development, financial depth, and financial stability and creates an association between FI and EG, including trade and foreign investment. Once the FI index is constructed, panel data analysis is applied by examining the stationarity and cointegration of the series, followed by panel regression and causality tests. Findings highlight a strong interlinkage between FI, EG, trade, and foreign investment for the selected nations. It suggests that the nations emphasize financial inclusion to stimulate EG, enhance trade, and increase foreign investment inflows. Each of the three variables is highly integrated, as indicated in the results, and acts as prerequisites for each other. The study is a significant contribution to the field of FI, trade, and EG. As very few studies have been carried out for integrated analysis, this study helps devise policies for expanding further relationships between FI, trade, investment, and EG across nations. Moreover, this study is the first to select a time period that marks major events like the US-China Trade War (2018) and the Global Financial Crisis (2008). The results of this study are helpful to the governments and policymakers of various economies. They can improvise the existing policies and procedures related to trade and foreign investment to enhance FI and EG. It is seen that for each country, the effect of the variables selected is different. In terms of developing holistic and effective trade policies, each nation can assess the relationship between these four key macroeconomic variables.

Financial inclusion is critical to supporting women’s entrepreneurial endeavors in today’s changing financial landscape. Despite representing the majority of micro and small businesses (SMEs) in Indonesia, women entrepreneurs continue to confront challenges to their development and sustainability. Supply-side discrimination, low financial literacy, restricted access to formal institutions, and a low demand for capital all hinder their ability to obtain finance, which is frequently biased against male entrepreneurs. This study looks at how financial literacy, financial inclusion, and financial access affect entrepreneurial development, firm performance, and sustainability among Indonesian women entrepreneurs. Five hundred forty-two responses were collected from women entrepreneurs during June–July 2024 and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results show that financial inclusion (β = 0.524) and financial literacy (β = 0.296) significantly improve financial access, which positively affects women’s entrepreneurial development (β = 0.484) and business performance (β = 0.383). Women’s entrepreneurial development also contributes to performance (β = 0.364), strongly affecting business sustainability (β = 0.502). Notably, the model explains 55.8% of the variance in women-owned SMEs’ business sustainability (R2 = 0.558), the highest among all endogenous constructs. This study enhances existing knowledge by emphasizing the interrelated roles of financial literacy, inclusion, and access in shaping women’s entrepreneurial ecosystems. This highlights the necessity for specific policies and initiatives aimed at tackling structural obstacles and gender inequalities in the financial sector. Enhancing these components can enable women entrepreneurs, improve SME performance, and foster sustainable, inclusive economic growth in Indonesia.

Final Report on Private Sector Development in the MED-11 Region

Summary The objective of this study is to analyse the effect of financial inclusion on the development of the private sector in ECCAS countries. It considers a panel of eight (08) countries over the period 2005 - 2019. The data used are secondary and come from the World Development Indicators database. A regression using the fixed-effects method reveals, on the one hand, that available gross savings as a percentage of GDP has a positive effect on private gross fixed capital formation as a percentage of GDP and, on the other hand, that domestic credit to the private sector as a percentage of GDP has a positive effect on private gross fixed capital formation as a percentage of GDP. All in all, therefore, financial inclusion has a positive and significant effect on the development of the private sector in the eight ECCAS countries considered. It is therefore of the utmost importance to promote savings and access to credit on a large scale in order to finance the development of the private sector in the ECCAS countries, which will of course lead to economic growth.

This study examines the role of lifestyle in mediating the influence of financial literacy and financial inclusion on the decision to take online loans. This research was conducted on women who use online loans in Indonesia. The sampling method used nonprobability sampling, with the respondents being 200 Indonesian women who used online loans. Data analysis uses Partial Least Square (PLS) to test the direct and indirect effects of financial literacy and financial inclusion on online loan decision-making. The results show that financial literacy, inclusion, and lifestyle significantly positively affect online loan decision-making. Financial literacy does not affect lifestyle, while financial inclusion significantly affects women's lifestyles in Indonesia. Lifestyle cannot mediate the influence of financial literacy and financial inclusion on women's online loan decision-making in Indonesia. The results of this study emphasize the importance of financial literacy and inclusion in shaping good financial behavior, especially in making decisions to apply for loans. Efforts to increase financial literacy and access to financial inclusion can be the primary strategy to improve the financial behavior of women in Indonesia in online loan decision-making.

Current problem of tackling poverty in China has been effectively solved, and the scale of the poor has been greatly reduced. However, the task of achieving comprehensive poverty alleviation across the country in 2020 remains daunting. Financial poverty alleviation strategies, especially vigorously developing inclusive finance is one of the effective ways to achieve comprehensive poverty alleviation. This paper aims to test whether inclusive finance policies has positive effects on our poverty alleviation work. We select nine provinces panel data, constructing the inclusive financial index in three dimensions: financial support, permeability, and accessibility. Based on the calculated inclusive financial index, this paper establishes a regression with income poverty, educational poverty and medical poverty as explained variables, inclusive financial index as explanatory variable, and control variables such as economic growth, local education level, and local medical level. The results show that the level of inclusive financial development has a significant positive impact on the income poverty. However, when it comes to educational and medical poverty alleviation, the improvement of the inclusive financial level in a short period does not reflect obvious promotion effects, but has negative impacts. Finally, we suggest the government that continuously improve the accessibility of inclusive financial services; increase the distribution of outlets of inclusive financial institutions, specifically by adding inclusive financial institutions, ATMs, financial poverty alleviation service stations, etc.; and constantly improve financial infrastructure to better provide financial services and improve the availability of inclusive financial services.

The study investigated the portfolios of insurance investments and private sector growth in Nigeria; for the period (1996-2018). Private sector output is taken as the dependent variable to measure the private sector performance; whereas, cash deposits, government securities and bill of exchange are employed as the independent variables to measure portfolios’ insurance investments in Nigeria. Hypotheses formulated were tested using Ordinary Least Squares (OLS) technique. The study revealed a significant relationship between cash deposit and Gross Domestic Product in Nigeria. Government securities has a significant relationship with Gross Domestic Product in Nigeria. Bill of exchange has a significant relationship with Gross Domestic Product in Nigeria. The coefficient of determination indicated that about 64% of the variations in private sector growth can be explained by changes in insurance industry variables in Nigeria. The study concluded that the portfolios insurance investments significantly contributed to the growth and development of the private sector economy. The study recommends that policy makers should pursue an all-inclusive growth promoting financial system. Awareness should be increased to raise the level of patronage. Relevant agencies like the Police and the Federal Road Safety Commission should prosecute unlicensed and uninsured vehicles. Insurance companies should adopt faster methods of processing claims to enhance their image and patronage. Keywords: Insurance, Investment Portfolio, Private Sector Growth, Nigeria

Purpose ― The main objective of this study is to develop a comprehensive digital financial inclusion index (CDFII) that accounts for technology-driven financial inclusion and to compare it with a traditional financial inclusion index (TFII) to enhance the measurement of fintech-driven financial inclusion across countries.Methods ― The study employs a three-stage principal component analysis (PCA) to construct the CDFII and TFII using the latest available data from 31 developing countries during the period 2015-2021. The CDFII incorporates a new sub-index measuring individual literacy levels for using financial services, along with existing sub-indices capturing the penetration, availability, and usage of DFS. By integrating digital financial inclusion (DFII) and TFII, the overall CDFII is estimated.Findings ― The findings reveal that the levels of DFII and CDFII are higher than TFII for most of the economies examined. This indicates the significant impact of technology-driven financial inclusion in expanding access to formal banking and non-banking financial services for previously unbanked populations.Implication ― The study implies that policymakers and researchers should prioritize the integration of technology-driven financial inclusion indicators, such as the comprehensive digital financial inclusion index (CDFII), into their assessments and interventions to ensure a more accurate and effective approach to promoting inclusive and sustainable economic development.Originality ― This study introduces the CDFII as a novel comprehensive index that addresses the shortcomings of traditional financial inclusion indices. By incorporating individual skill levels and considering dimensions specific to DFS, the CDFII provides a more accurate representation of fintech-driven financial inclusion levels. This contributes to the existing literature on financial inclusion measurement and provides a valuable analytical tool for researchers and policymakers.

This research focuses on the multifaceted realm of financial inclusion within Developing Countries. It unfolds a meticulous exploration by formulating a financial inclusion index based on data extracted from a sample comprising 75 Developing Countries, spanning the period from 2010 to 2018. The index's creation comprises of two distinct stages. In stage one, a principal component analysis is applied to derive sub-indices encapsulating the dimensions of access, utilization of financial services, technological advancements, and infrastructure, drawing from an array of 24 financial indicators. Subsequently, the second stage normalizes values within each dimension, culminating in an overall index through the application of the Euclidean Formula. The findings of this study emphasized the pivotal role of a National Financial Inclusion Strategy in enhancing financial inclusion in each respective country. Customization of these strategies to align with specific economic goals of each nation is paramount. Central to these objectives are primary priorities, which diverge among countries. Notably, countries like Romania, Serbia, and Mauritius place a premium on fostering financial literacy, while others such as Pakistan, Costa Rica, Rwanda, and Guinea emphasize the growth of Small and Medium Enterprises. In contrast, nations like Guatemala, Mauritania, Thailand, and Ukraine concentrate on expanding their financial networks. Furthermore, countries grappling with low levels of financial inclusion attribute this challenge to factors such as deficient financial literacy, the absence of a well-defined financial inclusion strategy, financial constraints, a preference for traditional financial services, and limited awareness surrounding digital innovations. Conversely, nations boasting moderate levels of financial inclusion, yet not progressing towards higher levels, point to the dearth of technological innovation and restricted prudential measures as pivotal stumbling blocks. This comprehensive analysis underscores the necessity of dynamic strategies tailored to individual countries to achieve robust financial inclusion on a global scale.

When CSR Worlds Integrate - Shifting the Paradigm to Achieve Private Sector Growth Building African Internal Markets

The study aimed to test the relationship between financial inclusion and women's empowerment in Iraq to determine whether financial inclusion promotes women's empowerment under the pretext that if we can empower women, this will have a positive impact on the sustainable development process in the country. The study adopted the descriptive analysis approach to test the variables of the study, namely, financial inclusion (owning an account, owning a bank card, saving with an official financial institution, borrowing from an official institution, borrowing from family or friends, receiving salaries from the public sector, and receiving salaries from the private sector) as an independent variable and its relationship to economic empowerment expressed in the percentage of women's participation in the labor market as a dependent variable. The secondary data of the study was collected based on the Global Findex database issued by the World Bank. The study period included four periods for 10 years (2011 - 2021) based on the survey periods issued by the World Bank every three years. Based on the descriptive analysis, the study found that the percentage of women's participation in the labor market in Iraq is very weak in the public and private sectors and that the utilization of financial inclusion programs promotes women's empowerment economically. Thus, the results proved the validity of the study hypothesis that there is a strong relationship between indicators of financial inclusion and the empowerment of women in Iraq. The study recommended the decision-makers should review fiscal policies associated with financial inclusion programs to be more suitable for women by expanding digital financial services to link women, especially female entrepreneurs, to markets, increasing income, reducing poverty, facilitating women's control largely over their profits and savings, and all the critical elements of women's economic empowerment.

Best practices, policy and innovations in the administration of healthcare in developing communities and countries. For administrators, academics, researchers and policy leaders. Includes peer reviewed research papers. Edited by Dr. Judith Shamian, President Emeritus, International Council of Nurses, Professor and Co-investigator with the Nursing Health Services Research Unit, Lawrence S. Bloomberg Faculty of Nursing, University of Toronto, Toronto, ON

Despite extensive research on external capital flows, limited attention has been given to the joint determinants of remittances and foreign direct investment (FDI) within an integrated financial–institutional–infrastructural framework. Existing studies often assess these flows separately, overlooking the dynamic interdependence between financial inclusion, efficiency, institutional quality, and infrastructural access. This study addresses this gap by examining how these factors simultaneously shape remittance and FDI inflows using a comprehensive panel dataset. Employing advanced econometric approaches—including second-generation panel unit root and cointegration tests, CS-ARDL, AMG, CCEMG estimators, and dynamic System-GMM—the analysis captures long-run equilibrium, short-run dynamics, and addresses endogeneity concerns. The findings reveal that financial inclusion, efficiency, institutional strength, and energy access are significant drivers of both remittances and FDI, though their effects differ in magnitude and persistence across models. By documenting bidirectional causality, particularly between remittances and financial inclusion and between FDI and institutional quality, the study highlights the reinforcing feedback between external flows and domestic systems. These results contribute to the literature by offering an integrated perspective and provide policy insights for strengthening financial deepening, institutional credibility, and infrastructure readiness to mobilize remittances and attract sustainable FDI.

PurposeThe purpose of this paper is to calculate the financial inclusion index and analyze its dynamics in developing countries.Design/methodology/approachThe authors use the two-stage principal component analysis (PCA) method and consider financial technology innovations to improve the accuracy of the financial inclusion index.FindingsThe authors found a downward trend in the financial inclusion index in most developing countries over the study period. The authors also found that a high financial inclusion index is linked to high scores in the Doing Business and high business climate regulation ranking. In addition, the authors observed that the rates of low financial inclusion in developing countries are due to low utilization of and unequal access to financial services.Practical implicationsThe analysis suggests that policymakers in developing countries could invest in digital infrastructure to extend access to financial services in remote areas. They could also encourage financial innovation, particularly in financial technologies, by adopting flexible regulatory frameworks. Promoting the financial inclusion of marginalized groups through targeted initiatives tailored to their needs is another solution. They could also encourage the use of financial services by raising awareness and educating populations through training programs. Finally, to improve the business climate, governments could simplify administrative procedures and promote transparency and legal stability.Originality/valueUnlike previous studies, the use of the two-stage PCA method and the consideration of financial technology (Fintech) innovations such as mobile money in the determinants of the financial inclusion index improve the accuracy of the index.