Financial inclusion: a catalyst for financial system development in emerging and frontier markets

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dc.contributor.authorOfosu-Mensah, J.A.
dc.contributor.authorYiadom, E.B.
dc.contributor.authorSarpong-Kumankoma, E.
dc.contributor.authorBoadi, I.
dc.date.accessioned2023-10-05T10:00:30Z
dc.date.available2023-10-05T10:00:30Z
dc.date.issued2023
dc.descriptionResearch Articleen_US
dc.description.abstractPurpose – This study aims to examine the relationship between financial inclusion and financial system development in emerging and frontier markets. Design/methodology/approach – Using data across 35 countries over 19 years (2004–2022), the improved GMM estimation technique reveals that financial inclusion significantly contributes to the development of financial systems. Findings – The study uses a segmented approach, dividing financial development indices into subindices: financial depth, financial access and financial efficiency. Indicators of bank financial inclusion show a positive and highly significant relationship with bank depth and access but a negative relationship with bank efficiency. Similarly, indicators of the debt market and stock market financial inclusion demonstrate positive relationships with market depth and access but negative relationships with debt and stock market efficiency. The study further examines composite indexes of financial inclusion for bank, debt and stock market segments, finding strong and highly significant relationships with market development. These results underscore the importance of promoting financial inclusion across all segments of the financial sector to achieve an inclusive financial system. Practical implications – The implications of this research highlight the need for policymakers and practitioners to implement policies and regulations that enhance financial inclusion and foster the development of robust financial systems. By extending access to mainstream financial instruments and services, financial institutions can stimulate financial intermediation and support, thereby accelerating the development of the banking, debt and stock markets. Originality/value – The study is robust to the use of several indicators of financial inclusion and financial development, and it forms part of the early studies that examine the close relationship between the two variables.en_US
dc.identifier.otherDOI 10.1108/JFEP-06-2023-0155
dc.identifier.urihttp://ugspace.ug.edu.gh:8080/handle/123456789/40267
dc.language.isoenen_US
dc.publisherJournal of Financial Economicen_US
dc.subjectFinancial inclusionen_US
dc.subjectFinancial sector developmenten_US
dc.subjectBank marketen_US
dc.titleFinancial inclusion: a catalyst for financial system development in emerging and frontier marketsen_US
dc.typeArticleen_US

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