IDEAS home Printed from https://ideas.repec.org/a/eis/articl/216garcia.html
   My bibliography  Save this article

Can financial inclusion and financial stability go hand in hand?

Author

Listed:
  • M J Roa Garcia

Abstract

This study addresses the relation between financial inclusion and financial stability. In order to do so, we review studies on the diverse possible links between these two financial phenomena for developing countries. Although some results are still preliminary, from the reviewed studies we can draw some conclusions. First, risk may rise from rapid credit growth associated with new financial inclusion institutions and instruments, and from unregulated parts of the financial system. However, broader access to deposits that leads to a more diversified base of deposits, could improve significantly the resilience of the overall financial system and thus financial stability. A further conclusion is that it is important to specify what type of state intervention or regulation is necessary in the particular case of financial inclusion. The application of standards and other measures that guarantee financial stability might prove to be a setback to inclusion processes.

Suggested Citation

  • M J Roa Garcia, 2016. "Can financial inclusion and financial stability go hand in hand?," Economic Issues Journal Articles, Economic Issues, vol. 21(2), pages 81-103, September.
  • Handle: RePEc:eis:articl:216garcia
    as

    Download full text from publisher

    File URL: http://www.economicissues.org.uk/Files/2016/216Garcia.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Alfred Hannig & Stefan Jansen, 2010. "Financial Inclusion and Financial Stability : Current Policy Issues," Finance Working Papers 23124, East Asian Bureau of Economic Research.
    2. Jeremy C. Stein, 2012. "Monetary Policy as Financial Stability Regulation," The Quarterly Journal of Economics, Oxford University Press, vol. 127(1), pages 57-95.
    3. Peter J. Morgan & Victor Pontines, 2014. "Financial Stability and Financial Inclusion," Microeconomics Working Papers 24278, East Asian Bureau of Economic Research.
    4. Jorge Ponce & Magdalena Tubio, 2010. "Estabilidad financiera: conceptos básicos," Documentos de trabajo 2010004, Banco Central del Uruguay.
    5. Reynaldo Marconi & Paul Mosley, 2006. "Bolivia during the global crisis 1998-2004: towards a 'macroeconomics of microfinance'," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(2), pages 237-261.
    6. repec:imf:imfsdn:15/8 is not listed on IDEAS
    7. Robert Cull & Asl? Demirgüç-Kunt & Timothy Lyman, 2012. "Financial Inclusion and Stability : What Does Research Show?," World Bank Other Operational Studies 9443, The World Bank.
    8. Hannig, Alfred & Jansen, Stefan, 2010. "Financial Inclusion and Financial Stability: Current Policy Issues," ADBI Working Papers 259, Asian Development Bank Institute.
    9. Frederic S. Mishkin, 1999. "Global Financial Instability: Framework, Events, Issues," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 3-20, Fall.
    10. Era Dabla-Norris & Yixi Deng & Anna Ivanova & Izabela Karpowicz & Filiz D Unsal & Eva VanLeemput & Joyce Wong, 2015. "Financial Inclusion; Zooming in on Latin America," IMF Working Papers 15/206, International Monetary Fund.
    11. Patten, Richard H. & Rosengard, Jay k. & Johnston, Don JR., 2001. "Microfinance Success Amidst Macroeconomic Failure: The Experience of Bank Rakyat Indonesia During the East Asian Crisis," World Development, Elsevier, vol. 29(6), pages 1057-1069, June.
    12. Demirguc-Kunt,Asli & Klapper,Leora & Singer,Dorothe & Van Oudheusden,Peter, 2015. "The Global Findex Database 2014 : measuring financial inclusion around the world," Policy Research Working Paper Series 7255, The World Bank.
    13. Augusto de la Torre & Alain Ize & Sergio L. Schmukler, 2012. "Financial Development in Latin America and the Caribbean : The Road Ahead
      [El desarrollo financiero en América Latina y el Caribe : el camino por delante]
      ," World Bank Publications, The World Bank, number 2380, September.
    14. Ratna Sahay & Martin Cihak & Papa M N'Diaye & Adolfo Barajas & Diana B Ayala Pena & Ran Bi & Yuan Gao & Annette J Kyobe & Lam Nguyen & Christian Saborowski & Katsiaryna Svirydzenka & Seyed Reza Yousef, 2015. "Rethinking Financial Deepening; Stability and Growth in Emerging Markets," IMF Staff Discussion Notes 15/08, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:cml:incocp:7sp-05 is not listed on IDEAS
    2. repec:cml:incocp:7en-05 is not listed on IDEAS

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eis:articl:216garcia. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dan Wheatley). General contact details of provider: http://edirc.repec.org/data/bsntuuk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.