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

Ozili, Peterson K; Ademiju, Adekemi; Rachid, Semia

doi:10.1108/ijse-05-2022-0339

Cited by 37 publications

(25 citation statements)

References 47 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…(2000), Poshakwale and Qian (2011), Ayadi et al . (2015), Ozili et al . (2022b), Haggard and Tiede (2011) and Haidar (2012).…”

Section: Methodsmentioning

confidence: 99%

“…In total, eight variables were used in the empirical analyses. The eight variables used in the analyses have been used in previous studies such as Owusu (2012), Matei (2020), Ozili et al (2022a), Ruiz (2018), Mian et al (2017), Beck et al (2000), Poshakwale and Qian (2011), Ayadi et al (2015), Ozili et al (2022b), Haggard and Tiede (2011) and Haidar (2012). The dependent variables are the logarithm of the GDP per capita (LogCGDP) variable and the GDP growth rate (RGDP) variable.…”

Section: Ajems 144mentioning

confidence: 99%

“…When these changes are predictable, it allows economic agents to plan and adjust their business activities in anticipation of changes in external financing conditions. However, when credit supply increases or decreases in an unpredictable, unexpected or abnormal manner, it creates shocks that give rise to irrational behaviour among affected economic agents, and their behaviours lead to outcomes that affect economic output and growth (Ozili et al ., 2022a, b). In this paper, we consider the case of abnormal increase in credit supply.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Effect of abnormal increase in credit supply on economic growth in Nigeria

Ozili¹,

Oladipo

Iorember

2023

AJEMS

View full text Add to dashboard Cite

PurposeThis paper investigates the effect of abnormal increase in credit supply on economic growth in Nigeria after controlling for the quality of the legal system, size of central bank asset, banking sector cost efficiency and bank insolvency risk.Design/methodology/approachThe authors employ the generalised method of moments (GMM) regression methodology to estimate the effect of abnormal increase in credit supply on two measures of economic growth in Nigeria.FindingsThe abnormal increase in credit supply has a significant effect on economic growth. Abnormal increase in credit supply increases real gross domestic product (GDP) growth. The abnormal increase in credit supply decreases real GDP per capita during the global financial crisis. The abnormal increase in domestic credit to the private sector has a significant positive effect on GDP per capita when there is strong legal system quality in Nigeria. In contrast, the abnormal increase in domestic credit to the private sector has a significant negative effect on real GDP growth when there is strong legal system quality in Nigeria.Practical implicationsThe abnormal increase in credit supply is ineffective in increasing GDP per capita during crisis years. Policymakers should be cautious in pressuring financial institutions to release an abnormally large amount of credit into the economy particularly during financial crises. Rather, policymakers should encourage financial institutions to supply credit in a sustained manner – not in an abnormal manner –and in a way that supports growth.Originality/valueThe present study contributes to the literature by analysing the effect of abnormal increase in credit supply on economic growth in a developing country context.

show abstract

“…(2000), Poshakwale and Qian (2011), Ayadi et al . (2015), Ozili et al . (2022b), Haggard and Tiede (2011) and Haidar (2012).…”

Section: Methodsmentioning

confidence: 99%

Section: Ajems 144mentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Effect of abnormal increase in credit supply on economic growth in Nigeria

Ozili¹,

Oladipo

Iorember

2023

AJEMS

View full text Add to dashboard Cite

show abstract

“…Existing studies show that financial inclusion is related to economic growth. Ozili et al (2022a) review the existing literature on the impact of financial inclusion on economic growth and found that significant research on the topic emerged in the post-2016 years. It was also found that the most common channel through which financial inclusion affects economic growth is through greater access to financial products and services offered by financial institutions which increases financial intermediation and translates to positive economic growth.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Financial inclusion improves access to finance which increases consumption, production and investment, thereby leading to increase in economic output and higher economic growth (Erlando et al , 2020). Few studies have empirically examined the effect of financial inclusion on economic growth (Sethi and Acharya, 2018; Erlando et al , 2020; Ozili et al , 2022a). But there is little evidence on this relationship in religious settings.…”

Section: Introductionmentioning

confidence: 99%

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

Ozili¹,

Lay

Syed

2023

JFRC

Self Cite

View full text Add to dashboard Cite

Purpose Empirical research on the relationship between financial inclusion and economic growth has neglected the influence of religion or secularism. This study aims to investigate the effect of financial inclusion on economic growth in religious and secular countries. Design/methodology/approach The financial inclusion indicators are the number of automated teller machines (ATMs)per 100,000 adults and the number of bank branches per 100,000 adults. These two indicators are the accessibility dimension of financial inclusion based on physical points of service. The two-stage least square (2SLS) regression method was used to analyze the effect of financial inclusion on real gross domestic product (GDP) per capita growth and real GDP growth in religious and secular countries. Findings 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. This study also finds 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. Originality/value Few studies in the literature examined the effect of financial inclusion on economic growth. But the literature has not examined how financial inclusion affects economic growth in religious and secular countries.

show abstract

Why is financial inclusion so popular? An analysis of development buzzwords

Ozili¹,

Mhlanga

2023

J of Intl Development

Self Cite

View full text Add to dashboard Cite

We analyse the popularity of the term ‘financial inclusion’ in relation to other development buzzwords. We extract trend data for multiple development buzzwords across countries and cities from 2004 to 2022, and we run a series of empirical analyses. We find that the ‘financial inclusion’ buzzword is popular because the term ‘financial inclusion’ is correlated with other development buzzwords, particularly ‘microfinance’, ‘digital finance’, ‘inclusive finance’, ‘financial exclusion’ and ‘Fintech’ buzzwords. Financial inclusion buzzword is more popular in developing countries than in developed countries. Financial inclusion buzzword is also popular in major cities in developing countries. We also observe that the financial inclusion buzzword was more popular during the second wave of the COVID‐19 pandemic. There is uni‐directional causality between interest in financial inclusion and interest in fintech and inclusive finance, indicating that interest in financial inclusion buzzword causes interest in fintech and inclusive finance buzzword. There is also uni‐directional causality between interest in financial exclusion and interest in financial inclusion. Finally, there is a significant correlation between interest in the ‘financial inclusion’, ‘digital finance’, ‘inclusive finance’ and ‘Fintech’ buzzwords.

show abstract

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

Cited by 37 publications

References 47 publications

Effect of abnormal increase in credit supply on economic growth in Nigeria

Effect of abnormal increase in credit supply on economic growth in Nigeria

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

Why is financial inclusion so popular? An analysis of development buzzwords

Contact Info

Product

Resources

About