The Effect of Financial Inclusion and Competitiveness on Financial Stability: Why Financial Regulation Matters in Developing Countries?

Jungo, João; Madaleno, Mara; Botelho, Anabela

doi:10.3390/jrfm15030122

Cited by 40 publications

(32 citation statements)

References 63 publications

(140 reference statements)

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“…Al-Eitan et al (2022) findings indicated that the number of loan accounts and size of deposits significantly impacted the financial performance of the commercial banks in Jordan negatively. Jungo et al (2022) result indicated that there is no statistically significant effect of financial regulation on financial stability in SSA countries. Maity and Sahu's (2021) result indicated that a significant difference between Assam and aggregate Indian financial inclusion and the status of Assam is somewhat lower as compared to the aggregate financial inclusion status of India.…”

Section: Introductionmentioning

confidence: 90%

Financial Inclusion and Financial Performance of Deposit Money Banks in Nigeria

Appah¹,

S.F.²

2023

African Journal of Accounting and Financial Research

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This study investigated the relationship between financial inclusion and financial performance of deposit money banks in Nigeria from 2011 to 2021. The specific objectives were to investigate the relationship between customers loan and return on assets of deposit money banks in Nigeria; determine the relationship between customers deposit and return on assets of deposit money banks in Nigeria; evaluate the relationship between bank branches spread and return on assets of deposit money banks in Nigeria; ascertain the relationship between online banking and return on assets of deposit money banks in Nigeria; and investigate the relationship between agent banking and return on assets of deposit money banks in Nigeria. The study employed ex post facto and correlation research design with secondary data obtained from the Central Bank of Nigeria and financial institutions of deposit money banks. The population of the study consisted of all listed deposit money banks and a sample size of ten (10) was employed for data analyzing using univariate, bivariate and multivariate analysis. The results indicated a positive and significant relationship between loans to customers, deposits by customers, bank branches, mobile banking and agency banking on return on assets of deposit money banks. The study concluded that financial inclusion positively influences the level of financial performance of deposit money banks. On the basis of the conclusion, the paper recommended amongst others that financial inclusion innovation methods should be stressed in the financial sector through Central Bank of Nigeria (CBN) regulatory and advisories since it leads to improved financial performance and efficiency. In addition, the study also recommends that deposit money banks in Nigeria should invest more on agency, internet banking and ATM services to include the excluded people in financial services and products throughout the country since they provide significant influence on the financial performance of deposit money banks.

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Section: Introductionmentioning

confidence: 90%

Financial Inclusion and Financial Performance of Deposit Money Banks in Nigeria

Appah¹,

S.F.²

2023

African Journal of Accounting and Financial Research

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“…Several indicators have been used to assess the extent of financial inclusion, which can be classified into accessibility, availability and usage dimensions. However, the use of an individual indicator may lead to partial information and a misleading conclusion; therefore, we proposed a composite index [19,20,53,54]. On the other hand, there are various financial stability indicators that are linked to financial soundness, stress testing and financial sector development [4,31,48].…”

Section: Methodsmentioning

confidence: 99%

Causality between Financial Inclusion, Financial Stability and Economic Growth in Sub-Saharan Africa

Jima

Makoni

2023

Sustainability

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Financial inclusion has become a policy agenda for financial stability and sustainable economic growth for the developing world. However, there seems to be a lack of consensus across the literature on the relationships between financial inclusion, financial stability and economic growth. Given the divergent views, this paper aims to examine the causal relationships between financial inclusion, financial stability and economic growth in the Sub-Saharan African (SSA) countries. In this study, panel data were used for twenty six selected SSA economies and a principal component analysis (PCA) was applied to construct a composite index for financial inclusion. In addition, an autoregressive distributed lags (ARDL) cointegration test was applied to examine the short- and long-run relationships between the variables of interest. Separate and joint Granger causality tests were used to assess the direction of causality. The result of the study indicated that there are both short-run and long-run relationships between financial inclusion, financial stability and economic growth in the SSA countries. Moreover, the Granger causality tests revealed that there are separate two-way causalities and joint uni-directional causalities, indicating complementarity between these variables. It is, therefore, necessary for policy makers, regulators and financial sector advisors to follow a holistic approach while developing and implementing policies and strategies that promote financial inclusion in order to attain sustainable economic growth in the region.

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“…The public interest theory of regulation proposed by Kern (2019) suggests that governments could take policy and regulatory interventions to deal with negative externalities generated by market distortions and regulatory arbitrage. Effective financial regulation could improve the production efficiency of enterprises by eliminating systemic risks (Kou et al, 2022), enhancing asset quality and capital levels (Igan & Mirzaei, 2020), limiting unsustainable bank credit expansion (Gupta & Kashiramka, 2020), and preventing financial instability (Anarfo et al, 2020;Jungo et al, 2022). Thus, financial regulation is unquestionably important to maintain a fair playing field inside and between financial systems, ensure the soundness and resilience of banking systems and protect the orderly running of businesses.…”

Section: Literature Reviewmentioning

confidence: 99%

“…The reasons why the efficiency scores of financing and R&D in SMEs in coastal and non-coastal areas of China increased after adding the intensity of financial regulation are as follows. Firstly, effective financial regulation could maintain financial stability (Rizwan et al, 2018;Jungo et al, 2022). By supervising the activities of financial institutions and enterprises, it is possible to prevent the financial system from being disordered and improve the efficiency of resource allocation (Badertscher et al, 2013;Shroff et al, 2017).…”

Section: The Influence Of Financial Regulation On the Efficiency Of I...mentioning

confidence: 99%

“…However, these arrangements must be carried out under strict regulation. Strengthening the regulation of financial institutions and enterprises in the financial market is conducive to reducing risks (Kou et al, 2022) and maintaining the stability of the financial market (Jungo et al, 2022). Most previous literature on the efficiency of innovation in technology-based SMEs ignored the impact of financial regulation.…”

Section: Introductionmentioning

confidence: 99%

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THE EFFICIENCY OF FINANCING AND R&D IN TECHNOLOGY-BASED SMES AND IMPACT OF FINANCIAL REGULATION

Feng

Zhang

Chiu

et al. 2022

Technological and Economic Development of Economy

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Technological innovation is a long-term activity with highly unpredictable returns on investment, which makes SMEs with information problems and lack of collateral value be vulnerable to financing constraints when engaging in innovation activities. This study incorporates financing and R&D activities into the evaluation of innovation efficiency and further considers the impact of financial regulation as an external factor in technology-based SMEs in China. This study puts forward a three-stage dynamic DDF-DEA model to explore the overall innovation efficiency as well as the efficiency of each stage in technology-based SMEs by dividing the innovation process into three stages, namely the financing stage, R&D stage and operating stage. The study reveals that the overall efficiency of innovation are higher in non-coastal areas of China than in coastal areas. Non-coastal regions have higher efficiency in the financing and operating stages, while coastal regions have higher efficiency in the R&D stage. Strengthening financial regulation could improve the financing and R&D efficiency both in coastal and non-coastal areas, but it has different effect on the operating efficiency in coastal and non-coastal areas. The results of this study could provide some reference for China and other emerging economies to formulate policies in improving the efficiency of financing and R&D.

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The Effect of Financial Inclusion and Competitiveness on Financial Stability: Why Financial Regulation Matters in Developing Countries?

Cited by 40 publications

References 63 publications

Financial Inclusion and Financial Performance of Deposit Money Banks in Nigeria

Financial Inclusion and Financial Performance of Deposit Money Banks in Nigeria

Causality between Financial Inclusion, Financial Stability and Economic Growth in Sub-Saharan Africa

THE EFFICIENCY OF FINANCING AND R&D IN TECHNOLOGY-BASED SMES AND IMPACT OF FINANCIAL REGULATION

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