IMPACTS OF FINANCIAL INCLUSION ON POVERTY AND INCOME INEQUALITY IN DEVELOPING ASIA

2021 ◽  
pp. 1-17
Author(s):  
WARATTAYA CHINNAKUM
Keyword(s):  
Developing Countries ◽  
Income Inequality ◽  
Low Income ◽  
Financial Services ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Principal Component ◽  
Financial Inclusion ◽  
Poor Households ◽  
Low Income Groups

This study investigates the impacts of financial inclusion on poverty and income inequality in 27 developing countries in Asia during 2004–2019 based on a composite financial inclusion index (FII) constructed using principal component analysis (PCA). The generalized method of moments (GMM) was employed for the estimation. The results show that financial inclusion can influence the reduction in both poverty and income inequality. The empirical findings also reveal the contribution of such control variables as economic growth in decreasing income disparity and trade openness in helping improve the standard of living of poor households despite its tendency to co-vary with income inequality. The present empirical evidence supporting the role of financial inclusion in reducing poverty and income inequality in developing countries has led to a policy implication that financial sector development should focus on the availability, usage, and depth of credit to cover all poor households or low-income groups to help improve their access to financial services, enable them to increase their income, and reduce the income gap between poor and rich households.

FINANCIAL INCLUSION THROUGH MICRO FINANCE

2021 ◽  
pp. 1-4
Author(s):  
P. Nagarajan
Keyword(s):  
Developing Countries ◽  
Low Income ◽  
Rural Areas ◽  
Banking Sector ◽  
Financial Inclusion ◽  
Vulnerable Groups ◽  
Poor People ◽  
Resource Base ◽  
Income Groups ◽  
Low Income Groups

Finance has become an essential part of an economy for development of the society as well as economy of nation. World leaders are embracing nancial inclusion at an accelerating pace, because they know that an inclusive nancial system that responsibly reaches all citizens is an important ingredient for social and economic progress for emerging markets and developing countries. Despite the political tailwind, half of the working-age adults globally – 2.5 billion people – remain excluded from formal nancial services. Instead, they have to rely on the age-old informal mechanisms of the moneylender or pawnbroker for credit or the rotating savings club and vulnerable livestock for savings. The pandemic has had a momentous impact on economies and societies around the world. At the same time, it has shown that, with the right approach, it is possible to protect and safeguard the economy. . Through Financial inclusion we can achieve equitable and inclusive growth of the nation. Financial inclusion stands for delivery of appropriate nancial services at an affordable cost, on timely basis to vulnerable groups such as low income groups and weaker section who lack access to even the most basic banking services. It helps in economic development as it widens the resource base of the nancial system by developing a culture of savings among large segment of rural population. Further, nancial inclusion protects their nancial wealth and other resources in exigent circumstances by bringing low income groups within the perimeter of formal banking sector. Financial inclusion engages in including poor people in the formal banking industry with the intention of securing their minimal nances for future purposes. Micronance has become a medium of extending nancial services to unbanked sections of population. Micronance is banking the unbankables, bringing credit, savings and other essential nancial services within the reach of millions of people who are too poor to be served by regular banks, in most cases because they are unable to offer sufcient collateral. In a country like India with almost 30% (more than 360 million) people still below poverty line and according to latest census gures, more than 70% or 840 million people living in rural areas with little or no access to formal banking and other nancial services, micronance has a big role to play in order to bridge this gap. The Micro Finance Institutions occupies key position in nancial inclusion through micro nance where the exclusion. In developing countries, the growth of micronance institutions (MFIs) which specically target low income individuals are viewed as potentially useful for promotion of nancial inclusion. Even though MFIs at present, mainly offer only credit products; as they grow, they are likely to expand their product range to include other nancial services.

scholarly journals PROGRESS OF FINANCIAL INCLUSION THROUGH FIPs OF SCHEDULED COMMERCIAL BANKS

2017 ◽  
Vol 5 (8) ◽  
pp. 146-157
Author(s):  
Mohana Krishna Irrinki ◽  
Kuberudu Burlakanti
Keyword(s):  
Low Income ◽  
Financial Services ◽  
Banking Sector ◽  
Credit Cards ◽  
Vital Role ◽  
Financial Inclusion ◽  
Inclusive Growth ◽  
Continuous Growth ◽  
Low Income Groups ◽  
Bank Accounts

All the stakeholders of the economy had identified the need and importance of financial inclusion in the overall development of any country. Banking sector plays a very vital role in the success of financial inclusion. Government and RBI had formulated various programs, schemes and financial services for the financial betterment of the low income groups. Various initiations were taken in implementing financial inclusion and banks were asked to set self-regulated targets through financial inclusion plans through which the unbanked villages across the country were assigned to various banks and these banks were asked to bring all the unbanked segments into the banking fold. The paper aims at the evaluation of financial inclusion through the various parameters considered for the growth of financial inclusion. The banks through the efforts of their branches and Business Correspondents have seen the continuous growth in opening the bank accounts, issue of Kisan Credit Cards & General Credit Cards and the volume and value of transactions in the bank accounts. Financial Inclusion Plans of the banks are helping a lot in moving towards inclusive growth.

scholarly journals Effect of Financial Inclusion on Income Inequality in Sub-Saharan Africa

2020 ◽  
pp. 1-15
Author(s):  
Kipoh Mpele Esther
Keyword(s):  
Income Inequality ◽  
Low Income ◽  
Low Cost ◽  
Panel Study ◽  
Generalized Method Of Moments ◽  
Financial Inclusion ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Negative Effect ◽  
Sub Saharan

Aims: To analyze financial inclusion as a channel to alleviate inequality in order to provide insight into the edifice of inequality reduction. Study Design:  Dynamic panel study. Place and Duration of Study: Sub-Saharan African countries over the period 2004-2018. Methodology: Using the generalized method of moments (GMM) on a sample of 27 Sub-Saharan African countries. Results: The results show that the estimated financial inclusion index has a negative effect on income inequality. Therefore, the depth of commercial bank branches and the effective use of bank accounts reduce income inequality. Conclusion: Increase financial inclusion as well as the development of financial infrastructure and the provision of specific low-cost services tailored to low-income households.

scholarly journals FINANCIAL INCLUSION AND WOMEN EMPOWERMENT: A GENDER PERSPECTIVE

2018 ◽  
Vol 6 (5) ◽  
pp. 229-237
Author(s):  
Bincy George ◽  
K.T. Thomachan
Keyword(s):  
Low Income ◽  
Financial Services ◽  
Financial Inclusion ◽  
Women Empowerment ◽  
Bank Account ◽  
Banking Services ◽  
Income Groups ◽  
The Social ◽  
Social And Economic Development ◽  
Low Income Groups

This paper examines women empowerment associated with financial inclusion. Financial inclusion is delivery of banking services at an affordable cost to the vast sections of disadvantaged and the low-income groups. The various financial services include access to saving, credit, insurance, bank account etc. The access to financial services helps women in their social and economic development. It is noted that access to financial service through financial inclusion do have impact upon the social and financial empowerment of women leading to their overall empowerment.

A Study on Role of Financial Inclusion on Regional rural Banks with Reference to Kerala Gramin Bank

2021 ◽  
pp. 115-119
Author(s):  
Jithu George ◽  
Rashmi. R
Keyword(s):  
Correlation Analysis ◽  
Low Income ◽  
Financial Services ◽  
Secondary Data ◽  
Financial Inclusion ◽  
Vulnerable Groups ◽  
Easy Access ◽  
Dependent Variables ◽  
Low Income Groups

In simple words financial inclusion is defined as “the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost” (Rangarajan, 2008). The main aim of financial inclusion (FI) is to provide easy access to financial services to the underprivileged population of country. It is an attempt to raise the underprivileged population by making available of finance and there by achieving inclusive growth. This paper studies the financial inclusion of regional rural banks in Kerala. Both primary and secondary data used for the study.197 respondent’s data were collected through questionnaire and surveys. The research methodology used in this study was correlation analysis and descriptive statistics. The result of the correlation analysis shows there is positive correlation between independent and dependent variables also the peoples were aware about the inclusions that introduced and newly adapted by the banks. So, the aim of this study is to understand the various financial inclusion measures taken and its impact on creating awareness, benefits and better services to its customers by KGB.

scholarly journals Financial Inclusion in India

2020 ◽  
Vol 19 (2) ◽  
pp. 37-51
Author(s):  
Simon Thermadam
Keyword(s):  
Low Income ◽  
Financial Services ◽  
Financial Inclusion ◽  
Vulnerable Groups ◽  
Bank Account ◽  
Banking Services ◽  
Marginalised Groups ◽  
Low Income Groups ◽  
The Government ◽  
Major Factors

Financial inclusion, the process of ensuring access to financial services along with timely and adequate credit where needed by vulnerable groups, helps the weaker sections and low-income groups in different ways. With an active intervention of the government, a large number of the unbanked segments of the society could be included in various financial services in the last few years. As a result, the number of bank accounts has been increasing. Members from the marginalised groups, women, etc. are some of the direct beneficiaries of financial inclusion. By utilizing micro data of World Bank, ‘Global Financial Inclusion (Global Findex) Database 2017, the author observes that socio-economic factors, like educational level, age group, and employment have an important role in determining one’s access to banking services. But some problems arise when the account holders do not utilize the banking facilities properly, especially when a majority stays idle. Lack of money is still considered one of the major factors for a lack of interest in holding a bank account. The ownership of bank account by other members in the same family also stops many from opening a bank account. The government has to take active measures to solve these issues. Moreover, the remaining unbanked sections of the society have to be included in the financial services, by solving the various reasons cited.

scholarly journals Financial Inclusion and Economic Growth: Empirical Evidence from Selected Developing Economies

2020 ◽  
Vol 6 (1) ◽  
pp. 179-203
Author(s):  
Noor ul Ain ◽  
Samina Sabir ◽  
Nabila Asghar
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Low Income ◽  
Developing Economies ◽  
Generalized Method Of Moments ◽  
Political Stability ◽  
Income Group ◽  
Financial Inclusion ◽  
Institutional Variables ◽  
Positive Effect

Financial inclusion is a tool used to enhance economic growth, alleviate poverty, create employment and reduce income inequality in developing countries through providing affordable financial goods and services to low income group through financial institutions. This study analyzes the relationship among financial inclusion, entrepreneurship, institutions and economic growth for 33 developing countries over time 2004-2016 using Generalized Method of Moments (GMM). The variables of financial inclusion, entrepreneurship and institutions are incorporated in Solow growth model through total factor productivity. Empirical results show that financial inclusion has positive effect on economic growth while entrepreneurship has negative but significant effect on economic growth. Whereas some institutional variables like rule of law and political stability have negative and other institutional variables like control of corruption and government effectiveness have positive effect on economic growth.

New Trends in Interaction of Developed and Developing Countries in Innovation Sphere

2012 ◽  
pp. 3-14
Author(s):  
A. Eroshkin ◽  
M. Petrov
Keyword(s):  
Developing Countries ◽  
International Relations ◽  
Low Income ◽  
Large Scale ◽  
Research Capacity ◽  
Transnational Corporations ◽  
Income Groups ◽  
Global Innovation ◽  
Low Income Groups ◽  
Adaptive Nature

The economic and innovative rise of the developing states stimulated a deep restructuring of the existing system of international relations in science and technology sphere. As the article points, one of the main manifestations of this trend can be seen in the transformation of global innovation strategies of transnational corporations. The world’s largest TNCs, mostly based in the industrial nations, have begun to transfer growing segments and parts of their R&D programs to the developing countries in order to take advantage of their increased research capacity. As a result, the nature of the projects being implemented there by the TNCs is changing. Historically, the TNCs’ local R&D activities were of adaptive nature. Namely, the stress was made on modification of the products and services offered by the TNCS globally to the specifics of local markets. Currently, a growing number of transnational corporations are implementing the large-scale programs in the developing countries aimed at designing new types of products, including those targeted at the low-income groups of consumers that make up the bulk of the population in developing countries.

scholarly journals Economic Growth and Income Inequality in Developing Countries

2015 ◽  
Vol 9 (6) ◽  
pp. 79-82 ◽  
Author(s):  
Morteza Nemati ◽  
Ghasem Raisi
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Income Inequality ◽  
Income Distribution ◽  
Economic System ◽  
Development Strategy ◽  
Low Income ◽  
Poverty Eradication ◽  
The Relationship ◽  
Selection Of

Nowadays, improvement in income distribution and poverty eradication and hence low inequality are served as the main objectives of economic and social development strategy even prior than primary tasks of governments. to manifest importance of income distribution, some economists adopt income inequality and income distribution in society as criteria for economic system of the community, although these criteria and measures are theoretical for the economic system and this varies from the perspective of different people, however, it denotes on  importance of income distribution among individuals. The main objective of this study was to evaluate the effect of economic growth on income inequality in the selection of low-income developing countries.To this end, using panel data and data for 28 developing countries over the period 1990-2010 the relationship between GDP and the Gini coefficient was examined. The results indicate that as per hypothesis Kuznets in the early stages of growth, income inequality increases and then it declines in later stage.

FINANCIAL STABILITY AND FINANCIAL INCLUSION: THE CASE OF SME LENDING

2018 ◽  
Vol 63 (01) ◽  
pp. 111-124 ◽  
Author(s):  
PETER J. MORGAN ◽  
VICTOR PONTINES
Keyword(s):  
Low Income ◽  
Financial Services ◽  
Financial Stability ◽  
Developing Economies ◽  
Empirical Studies ◽  
Bank Lending ◽  
Financial Inclusion ◽  
Nonperforming Loans ◽  
Z Scores ◽  
Negative Impacts

Developing economies are seeking to promote financial inclusion, i.e., greater access to financial services for low-income households and firms. This raises the question of whether greater financial inclusion tends to increase or decrease financial stability. A number of studies have suggested both positive and negative impacts on financial stability, but very few empirical studies have been made. This study focuses on the implications of greater financial inclusion for small and medium-sized enterprises (SMEs) for financial stability. It estimates the effects of measures of the share of bank lending to SMEs on two measures of financial stability — bank nonperforming loans and bank Z scores. We find some evidence that an increased share of lending to SMEs aids financial stability by reducing non-performing loans (NPLs) and the probability of default by financial institutions.

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