Optimal financial inclusion
Peterson K Ozili
MPRA Paper from University Library of Munich, Germany
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)
New Economics Papers: this item is included in nep-fdg, nep-fle and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:101808
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