The impact of financial inclusion on economic growth: a cross-country analysis

Financial inclusion is a key driver of economic growth. This study evaluates its effect on economic growth in 59 high-income countries from 2004 to 2021, using panel data and quantile methods. Financial inclusion is measured through banking penetration, availability of banking services, and usage of financial services. The results reveal significant differences among countries, generally enjoying favorable macroeconomic conditions, and indicate slight convergence among them. Positive impacts on economic growth were observed from bank and facility penetration, while ATM penetration and financial deepening showed negative effects. Influential factors include capital, inflation rate, unemployment rate, economic openness, life expectancy, and population growth. The impact of financial inclusion is more pronounced in lower-income countries. Expanding financial inclusion through the Internet and mobile banking, especially in less privileged areas, and enhancing microfinance and user-friendly applications, are pivotal for economic growth.