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Financial Inclusion and Human Capital in Developing Asia: the Australian connection

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  • Rashmi Arora

Abstract

The Australian government as part of its aid programme allocates large funds to improve financial inclusion in developing countries. However, this does not take into account low educational levels in these countries. The existing literature on financial inclusion also treats the issue as mainly supply-centric and does not take cognisance of the fact that poor human development and high illiteracy levels in developing economies may prevent a large section of the population from benefitting from financial inclusion efforts, because of low awareness and comprehension of the financial services available. This study uses a detailed three-stage methodological approach to examine the relationship between financial development and human capital in 21 countries of developing Asia. The results show that a significant negative relationship exists between financial development proxied by M2/gdp and pupil:teacher ratios and a strong positive relationship exists between physical access to banks and expected years of schooling. Further, our financial development and educational development indices also show no clear pattern in the selected countries' financial and educational development.

Suggested Citation

  • Rashmi Arora, 2012. "Financial Inclusion and Human Capital in Developing Asia: the Australian connection," Third World Quarterly, Taylor & Francis Journals, vol. 33(1), pages 177-197.
    • Handle: RePEc:taf:ctwqxx:v:33:y:2012:i:1:p:177-197
    DOI: 10.1080/01436597.2012.627256
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    Cited by:

    1. Olayinka David-West & Oluwasola Oni & Folajimi Ashiru, 2022. "Diffusion of Innovations: Mobile Money Utility and Financial Inclusion in Nigeria. Insights from Agents and Unbanked Poor End Users," Information Systems Frontiers, Springer, vol. 24(6), pages 1753-1773, December.
    2. Armand Fréjuis Akpa & Dado Fabrice Degbedji & Augustin Foster Chabossou, 2024. "Assessing the effect of financial inclusion on human capital in West Africa: an heterogeneous analysis based on income level," SN Business & Economics, Springer, vol. 4(1), pages 1-18, January.
    3. Shika Saravanabhavan, 2018. "Understanding the disparity in financial inclusion across Indian States: A comprehensive index for the period 1984 – 2016," Working Papers 405, Institute for Social and Economic Change, Bangalore.
    4. Neha Arora & Naresh Kumar, 2021. "Does Financial Inclusion Promote Human Development? Evidence from India," Jindal Journal of Business Research, , vol. 10(2), pages 163-184, December.
    5. Md Abdullah Omar & Kazuo Inaba, 2020. "Does financial inclusion reduce poverty and income inequality in developing countries? A panel data analysis," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-25, December.
    6. Chengjuan Xia & Md. Qamruzzaman & Anass Hamadelneel Adow, 2022. "An Asymmetric Nexus: Remittance-Led Human Capital Development in the Top 10 Remittance-Receiving Countries: Are FDI and Gross Capital Formation Critical for a Road to Sustainability?," Sustainability, MDPI, vol. 14(6), pages 1-24, March.
    7. Kangyu Ren & Yuan Wang & Lulu Liu, 2023. "Impact of Traditional and Digital Financial Inclusion on Enterprise Innovation: Evidence from China," SAGE Open, , vol. 13(1), pages 21582440221, January.
    8. Kuldeep Singh & Madhvendra Misra & Jitendra Yadav, 2021. "Corporate social responsibility and financial inclusion: Evaluating the moderating effect of income," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(5), pages 1263-1274, July.
    9. Amirreza Kazemikhasragh & Marianna Vanessa Buoni Pineda, 2022. "Financial inclusion and education: An empirical study of financial inclusion in the face of the pandemic emergency due to Covid‐19 in Latin America and the Caribbean," Review of Development Economics, Wiley Blackwell, vol. 26(3), pages 1785-1797, August.
    10. Hermann Hegueu Ndoya & Charly Ondobo Tsala, 2021. "What drive gender gap in financial inclusion? Evidence from Cameroon," African Development Review, African Development Bank, vol. 33(4), pages 674-687, December.
    11. Marc Audi & Chan Bibi & Khalil Ahmad, 2019. "Financial Inclusion, Economic Growth and Human Well-Being Nexus: Empirics from Pakistan, India, China, Sri-Lanka, Bangladesh and Malaysia," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 8(4), pages 177-190, December.
    12. Funda H. Sezgin & Gökçe Tekin Turhan & Gamze Sart & Marina Danilina, 2023. "Impact of Financial Development and Remittances on Educational Attainment within the Context of Sustainable Development: A Panel Evidence from Emerging Markets," Sustainability, MDPI, vol. 15(16), pages 1-14, August.
    13. Taoyong Su & Yuzhu Yu & Yongheng Chen & Jian Zhang, 2019. "The Experience, Dilemma, and Solutions of Sustainable Development of Inclusive Finance in Rural China: Based on the Perspective of Synergy," Sustainability, MDPI, vol. 11(21), pages 1-18, October.
    14. Désiré Avom & Chrysost Bangaké & Hermann Ndoya, 2021. "Measuring financial inclusion in African countries," Economics Bulletin, AccessEcon, vol. 41(3), pages 848-866.
    15. Avom, Désiré & Bangaké, Chrysost & Ndoya, Hermann, 2023. "Do financial innovations improve financial inclusion? Evidence from mobile money adoption in Africa," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    16. Anh L.N. Ngo, 2019. "Index of Financial Inclusion and the Determinants: An Investigation in Asia," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(12), pages 1368-1382, December.

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