Financial inclusion and bank profitability: Evidence from a developed market

Vijay Kumar, Sujani Thrikawala and Sanjeev Acharya

Global Finance Journal, 2022, vol. 53, issue C

Abstract: Previous literature supports the view that financial inclusion leads to economic growth and helps alleviate poverty; however, it is still unclear whether financial inclusion increases bank profitability. Using a sample of 122 Japanese banks from 2004 to 2018, we investigate this question. We find that financial inclusion is important even in a developed economy; branch contraction reduces the profitability of Japanese banks, although the numbers of loan accounts and automated teller machines (ATMs) do not affect bank profitability. Among bank-specific variables, cost management, credit risk management, and bank size are the key drivers of profitability.

Keywords: Financial inclusion; Bank profitability; ATMs; Japanese banks (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:53:y:2022:i:c:s1044028321000077

DOI: 10.1016/j.gfj.2021.100609

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