Impact of financial inclusion on economic growth: review of existing literature and directions for future research

Peterson Ozili

MPRA Paper from University Library of Munich, Germany

Abstract: The impact of financial inclusion on economic growth is a topic that is generating widespread interest among researchers and practitioners. We review the existing literature to highlight the state of research in the literature and identify new opportunities for innovative research. We used a thematic literature review methodology which involves dividing the review along relevant themes. We find that significant research on the topic emerged in the post-2016 years. Most of the existing studies are from developing countries and from the Asian and African regions. Existing studies have not utilized relevant theories in explaining the impact of financial inclusion on economic growth. Most studies report a positive impact of financial inclusion on economic growth while very few studies show a negative impact. The most common channel through which financial inclusion affects economic growth is through greater access to financial products and services offered by financial institutions that increases financial intermediation and translates to positive economic growth. The common empirical methodology used in the literature are causality tests, cointegration and regression methods. Multiple proxies of financial inclusion and economic growth were used in the literature which partly explains the conflicting result among existing studies. The review paper concludes by identifying some directions for future research.

Keywords: financial inclusion; economic growth; literature review; access to finance; GDP; GDP per capita; causality tests; regression; cointegration; Africa; Europe; Asia; financial inclusion; index; theory. (search for similar items in EconPapers)
JEL-codes: E30 E32 G21 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-ban, nep-fdg, nep-fle, nep-gro, nep-pay and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Journal Article: Impact of financial inclusion on economic growth: review of existing literature and directions for future research (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:118788

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