Financial Inclusion and Economic Growth in OIC Countries

This paper examines the relationship between financial inclusion and economic growth in Organization of Islamic Cooperation (OIC) countries. In order to draw multilateral results, we have set up the panel data for 55 OIC countries and estimated not only the dynamic panel estimation, but also the panel VAR, IRFs, and panel Granger causality tests. Based on the results of dynamic panel estimations, we find that financial inclusion has a positive effect on economic growth. The IFRs results derived from the panel VAR analysis suggest that financial inclusion has positive effects on the economic growth and financial inclusion and economic growth have mutual causalities with each other based on the panel Granger causality tests. Therefore, it seems reasonable to conclude that financial inclusion has positive effect on the economic growth in OIC countries.