Optimal financial inclusion

Peterson Ozili

MPRA Paper from University Library of Munich, Germany

Abstract: This article reports the conditions for optimality in financial inclusion. The optimal level of financial inclusion is achieved when basic financial services are provided to members of the population at a price that is affordable and that price is also economically sufficient to encourage providers of financial services to provide such financial services on a continual basis. Any level of financial inclusion that does not meet these conditions is sub-optimal. The consequence of sub-optimal levels of financial inclusion are reported and I show that maintaining a sub-optimal level of financial inclusion – which is common in many countries – is incentive-inefficient both for users and suppliers of basic financial services.

Keywords: financial inclusion; optimal financial inclusion; excluded population; demand-side financial inclusion; supply-side financial inclusion. (search for similar items in EconPapers)
JEL-codes: O12 O17 O50 R2 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-fdg, nep-fle and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:101808

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