Determinants of Financial Inclusion
Session
Management Business and Economy
Description
Financial inclusion is a fundamental aspect of economic growth and development, encompassing the use of formal financial services such as bank accounts, credit, and insurance. Despite the progress in expanding access to these services, significant barriers remain that prevent many individuals and communities from benefiting fully from financial inclusion. This study investigates the determinants of financial inclusion across European countries, offering a broad perspective that includes various types of financial institutions, including traditional banking and other financial services. The research aims to understand how different macroeconomic factors influence financial inclusion within diverse European contexts. At the macroeconomic level, the study employs a two-stage Heckman Selection model to analyse how variables such as GDP per capita, banking costs, regulatory frameworks, and the structure of financial institutions impact the accessibility of financial services. In addition to macroeconomic factors, the study employs a probit model to explore individual-level determinants of financial inclusion. This model evaluates how personal characteristics, such as gender, income level, and geographic location, influence an individual’s ability to access and utilize financial services. The study’s preliminary findings reveal disparities in financial inclusion, with particular challenges faced by women and residents of rural areas. Women, in many cases, experience lower levels of financial inclusion compared to men, which can be attributed to a range of factors including socioeconomic barriers, cultural norms, and discriminatory practices. Rural populations also face significant obstacles, such as limited access to physical banking infrastructure and higher transaction costs, which can hinder their ability to engage with formal financial systems. These findings underscore the need for targeted policies and interventions to address the barriers to financial inclusion. Policies aimed at improving financial literacy, expanding access to financial services in underserved areas, and addressing gender disparities can play a crucial role in enhancing financial inclusion. The research also highlights the importance of considering the diverse landscape of financial institutions, from traditional banks to alternative financial service providers, in designing effective strategies to promote inclusive financial systems
Keywords:
financial inclusion, financial institutions, Heckman Selection model, probit analysis, economic development, gender disparities, rural access
Proceedings Editor
Edmond Hajrizi
ISBN
978-9951-982-15-3
Location
UBT Kampus, Lipjan
Start Date
25-10-2024 9:00 AM
End Date
27-10-2024 6:00 PM
DOI
10.3107/ubt-ic.2024.15
Recommended Citation
Jahja, Albulena, "Determinants of Financial Inclusion" (2024). UBT International Conference. 15.
https://knowledgecenter.ubt-uni.net/conference/2024UBTIC/MBE/15
Determinants of Financial Inclusion
UBT Kampus, Lipjan
Financial inclusion is a fundamental aspect of economic growth and development, encompassing the use of formal financial services such as bank accounts, credit, and insurance. Despite the progress in expanding access to these services, significant barriers remain that prevent many individuals and communities from benefiting fully from financial inclusion. This study investigates the determinants of financial inclusion across European countries, offering a broad perspective that includes various types of financial institutions, including traditional banking and other financial services. The research aims to understand how different macroeconomic factors influence financial inclusion within diverse European contexts. At the macroeconomic level, the study employs a two-stage Heckman Selection model to analyse how variables such as GDP per capita, banking costs, regulatory frameworks, and the structure of financial institutions impact the accessibility of financial services. In addition to macroeconomic factors, the study employs a probit model to explore individual-level determinants of financial inclusion. This model evaluates how personal characteristics, such as gender, income level, and geographic location, influence an individual’s ability to access and utilize financial services. The study’s preliminary findings reveal disparities in financial inclusion, with particular challenges faced by women and residents of rural areas. Women, in many cases, experience lower levels of financial inclusion compared to men, which can be attributed to a range of factors including socioeconomic barriers, cultural norms, and discriminatory practices. Rural populations also face significant obstacles, such as limited access to physical banking infrastructure and higher transaction costs, which can hinder their ability to engage with formal financial systems. These findings underscore the need for targeted policies and interventions to address the barriers to financial inclusion. Policies aimed at improving financial literacy, expanding access to financial services in underserved areas, and addressing gender disparities can play a crucial role in enhancing financial inclusion. The research also highlights the importance of considering the diverse landscape of financial institutions, from traditional banks to alternative financial service providers, in designing effective strategies to promote inclusive financial systems