Financial Inclusion and Development

  • Citation: Sarma, Mandira, and Jesim Pais. “Financial Inclusion and Development.” Journal of International Development 23, no. 5 (2011).
    • Topics:
    • Business and Trade
    • Keywords:
    • financial inclusion
    • development
    • country specific factors

An important question raised in the literature is whether development leads to an all-inclusive financial system. This paper attempts to examine the relationship between financial inclusion and development by empirically identifying country specific factors that are associated with the level of financial inclusion. It finds that levels of human development and financial inclusion in a country move closely with each other. Among socio-economic and infrastructure related factors, income, inequality, literacy, urbanisation and physical infrastructure for connectivity and information are important. Health of the banking sector does not seem to have an unambiguous effect on financial inclusion whereas ownership pattern does seem to matter.

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