Impact of financial inclusion on economic growth in secular and religious countries

Ozili, Peterson K and Lay, Sok Heng and Syed, Aamir (2023): Impact of financial inclusion on economic growth in secular and religious countries. Published in:

Abstract

Empirical research on the relationship between financial inclusion and economic growth has neglected the influence of religion or secularism. We investigate the effect of financial inclusion on economic growth in religious and secular countries. The financial inclusion indicators are the number of ATMs per 100,000 adults and the number of bank branches per 100,000 adults. The findings reveal that bank branch contraction significantly increases economic growth in secular countries. Bank branch expansion combined with greater internet usage increases economic growth in secular countries while high ATM supply combined with greater internet usage decreases economic growth in secular countries. We also find that bank branch expansion, in the midst of a widening poverty gap, significantly increases economic growth in religious countries, implying that financial inclusion through bank branch expansion is effective in promoting economic growth in poor religious countries. It was also found that internet usage is a strong determinant of economic growth in secular countries.

• Item Type: MPRA Paper
• Language: English
• Keywords: financial inclusion, economic growth, ATMs per 100,000 adults, bank branches per 100,000 adults, poverty, internet usage, access of finance, religion, religious countries, secular countries.
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E51 - Money Supply ; Credit ; Money Multipliers; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages

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