Financial Inclusion, Financial Regulation, and Education in Bangladesh

M. A. Baqui Khalily
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M. A. Baqui Khalily: Asian Development Bank Institute

No 621, ADBI Working Papers from Asian Development Bank Institute

Abstract: Like in many other countries, inclusive finance for inclusive growth has become a policy issue in Bangladesh following the global financial crisis in 2008. Over the past 10 years, intensity of financial deepening and access to financial services has increased. Both banks and microfinance institutions have contributed to higher intensity. A recent study shows that around 40% of the adult population and 75% of households have access to financial services in Bangladesh. Several factors may have contributed. Proactive regulatory policies and expanded financial literacy are the major determinants. In this paper, regulatory policies have been evaluated and the effect of financial literacy on financial inclusion has been examined empirically. Our analysis suggests that the regulatory agencies in Bangladesh have formulated policies for promoting financial inclusion and creating investment opportunities for micro and small firms in particular. Our empirical evidence, based on household-level data, shows that the intensity of financial literacy in Bangladesh is moderate, and it has a positive impact on inclusive finance. These findings warrant more emphasis on increasing financial literacy for access to finance and informed investment decisions.

Keywords: financial literacy; inclusive finance; regulation; microfinance; Bangladesh; banking (search for similar items in EconPapers)
JEL-codes: G21 G28 I22 O16 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2016-12-31
New Economics Papers: this item is included in nep-mfd and nep-pay
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Citations: View citations in EconPapers (1)

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