Quality of Institutions and Inclusive Financial Development in the Muslim World

Majeed, Muhammad Tariq

doi:10.1007/978-3-319-69799-4_1

Cited by 5 publications

(8 citation statements)

References 25 publications

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“…They find that institution quality is an important tool for reducing inequality. Majeed (2017) concludes that both inclusive financial development and institutions are essential for eradicating poverty for Islamic countries.…”

Section: Literature Reviewmentioning

confidence: 99%

The Effects of Institutional Quality on Formal and Informal Borrowing Across High-, Middle-, and Low-Income Countries

Khanh

2019

SSRN Journal

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Section: Literature Reviewmentioning

confidence: 99%

The Effects of Institutional Quality on Formal and Informal Borrowing Across High-, Middle-, and Low-Income Countries

Khanh

2019

SSRN Journal

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“…estimated the impact of ITC on economic growth, of which financial inclusion was positively affected by ITC development, then indirectly influenced economic growth, with a case study of 44 African countries between 1988 and 2007. Regarding Islamic banking, Hassan (2015) reviewed the conventional model and suggested the application of the Islamic solidarity principle in providing Islamic microfinance services for financial inclusion of the poor.Similarly,Naceur et al (2015) andMajeed (2017) also confirmed that Islamic banking was an effective avenue for financial inclusion in Muslim countries.…”

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confidence: 61%

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2019

Asian Economic and Financial Review

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Using panel data of twenty Asian countries over a period of six years (2011-2016), this research investigated the key determinants of financial inclusion among Asian countries via the Random Effects Model (REM). Financial inclusion has been considered as enabler for seven of the seventeen sustainable development goals, which brings access to financial services to all and directly contributes to poverty reduction, capacity buildings and equality. The main findings are that: (i) the countries with stronger economic growth and higher income have a significantly higher financial inclusion index, as people have more resources/incomes and better chances to utilize financial services; (ii) the higher the literacy, the better the financial inclusion as people with higher literacy understand the pros and cons of financial services and providers, better knowledge of using financial services wisely; (iii) unemployment rates had a negative impact on the financial inclusion index; (iv) surprisingly differing from previous studies, inflation, population density, network and deposit interest rate were not statistically significantly correlated with financial inclusion. Contribution/ Originality: This research investigated the key determinants of financial inclusion among Asian countries via REM. Four aspects relating to financial inclusion among Asian countries were deeply analyzed. 1. INTRODUCTION Financial inclusion is becoming a priority for policymakers, regulators and development agencies globally, as it has been defined as an enabler for seven of seventeen sustainable development goals (Demirgüç-Kunt et al., 2015; UNSGSA, 2016). The idea of promoting and developing financial inclusion was officially implemented in 2009, when the Queen of Netherlands became the Special Advocate of United Nations Secretary-General (UNSGSA, 2016). From that time, this matter was commonly known and developed to either propagandize or ameliorate financial services in order to foster universal access to the financial market. Financial inclusion is opposite to financial exclusion, and is defined simply as all individuals or small and medium enterprises having ability to access the formal services in the financial market (Sarma, 2008; Demirgüç

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“…Another study done by Perera and Lee (2013) which finds closed to our study by determining the effects of economic growth on poverty and income inequality in East and South Asia, this study ignores the effect of financial development on poverty and secondly it was only done for developing South and East Asian countries & completely ignored African countries. Another study which finds closed to our study is done by Majeed (2017) and it differs from a previous study firstly because it done for Muslim countries only. Secondly this study used only two proxies of financial development while we have used five proxies for developing financial development index.…”

Section: Introductionmentioning

confidence: 74%

“…Similarly, Stiglitz (1993) believes that poverty may be alleviated through expanding the poor's access to formal money by correcting financial market inefficiencies and defects. The empirical findings proved that the depth of financial development is instrumental to eradicate poverty (Aracil, Gómez-Bengoechea, & Moreno-de-Tejada, 2021;Bhatti, Chaudhry, & Bashir, 2021;Majeed, 2017). Similarly, Rewilak (2013) studied the poverty-finance nexus found that financial development reduce poverty in South Asian Region while his results are insignificant for Latin America and Caribbean countries.…”

Section: Literature Reviewmentioning

confidence: 86%

Economic Growth, Financial Development, Income Inequality and Poverty Relationship: An Empirical Assessment for Developing Countries

2022

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The paper contributes to the current literature by investigating the effects of economic growth, income inequality, and financial development on poverty for fifteen (15) developing countries. Panel data over the period from 2002 to 2018 has been used. Pooled Mean Group (PMG) technique has been applied for estimating the results. The study employs panel unit root tests namely: LLC and IPS for checking the unit root in the data. The long results show that all variables turned significant in the model. The income inequality shows positive relationship with poverty. Financial development and economic growth reveal adverse impact on poverty. Government spending and employment (increase in labor force participation) impact on poverty are negative. Furthermore, trade openness and inflation coefficients turned significant however, its sign are not according to the theory. Moreover, in the short run income inequality and economic growth show no impact on poverty. Financial development relationship with the poverty is still positive. Inflation revealed positive relationship with poverty. Trade openness show positive relationship with poverty. And other two variables government spending and labor force participation rate coefficients remained insignificant. The error correction coefficient i.e. speed of adjustment parameter is - 0.089. On the basis of the findings it is suggest that effective policies for boosting up economic growth, advancement of financial sector and reducing income inequality can significantly contribute towards the poverty reduction in the developing countries. It is suggested that the government shall formulate appropriate policies for the development of financial sector, boosting up economic growth and reduction of income inequality which will contribute to the reduction in poverty of the selected countries.

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Quality of Institutions and Inclusive Financial Development in the Muslim World

Cited by 5 publications

References 25 publications

The Effects of Institutional Quality on Formal and Informal Borrowing Across High-, Middle-, and Low-Income Countries

The Effects of Institutional Quality on Formal and Informal Borrowing Across High-, Middle-, and Low-Income Countries

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Economic Growth, Financial Development, Income Inequality and Poverty Relationship: An Empirical Assessment for Developing Countries

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