Issue Details
IMPACT OF FINANCIAL INCLUSION ON ECONOMIC STATUS AND INCOME DISPARITY IN DEVELOPING COUNTRIES
Suman Rani, Dr. Kuldeep Singh
Page No. : 18-25
ABSTRACT
This study investigates the impact of financial inclusion on poverty and income inequality in developing countries using panel data analysis. Financial inclusion, defined as access to and usage of financial services, is increasingly recognized as a critical factor in promoting economic development and reducing poverty. However, its effects on income distribution are less understood and vary across different contexts.
Using a panel dataset covering a sample of developing countries over a specific period, this study employs econometric techniques to analyze the relationship between financial inclusion, poverty rates, and income inequality. The findings suggest that increased financial inclusion generally correlates with lower poverty rates, indicating that improved access to financial services can help alleviate poverty by facilitating savings, investments, and access to credit among low-income populations.
However, the impact of financial inclusion on income inequality appears mixed and context-dependent. While it can potentially reduce inequality by providing opportunities for income generation among marginalized groups, it may also exacerbate inequality if access to financial services disproportionately benefits wealthier individuals or exacerbates credit disparities.
The study concludes with policy implications, emphasizing the importance of designing inclusive financial policies that target the most vulnerable populations while promoting equitable access to financial services. Addressing barriers to financial inclusion, such as regulatory constraints, lack of infrastructure, and financial literacy gaps, is crucial for maximizing its potential benefits in reducing poverty and promoting more equitable economic growth in developing countries.
FULL TEXT