The Role of Community Banks in Advancing Financial Inclusion and Sustainable Economic Development in Emerging Markets: A Systematic Review

This study, a systematic review, was designed to analyse the role of community-dependent financial institutions, specifically community banks, in financial inclusion and sustainable economic growth in emerging markets. PRISMA-s and PRISMA 2020 were used to guide the synthesis of the evidence, using descriptive mapping and thematic narrative analysis. A total of 138 records were identified; 1 duplicate was removed, and 42 were removed during screening, leaving 95 publications in total. The evidence included 66 empirical or analytical studies (69.5%) compared to 29 conceptual, review and policy publications (30.5%) and 75 studies (78.9%) were published between 2015 and 2022. By cross-regions, Pacific states had the highest percentage of studies (38.9%), African countries the second (28.4%), Asian countries the third (20.0%), and unspecified a fourth (11.6%), with a single study from Latin America (1.1%). 38 (40.0%) of the publications were related to general financial inclusion, 19 (20.0%) to digital finance, 16 (16.8%) to SME finance, 13 (13.7%) to microfinance, and 9 (9.5%) to direct community banking research. The most prominent results were: SME growth (25.3%), sustainable development (21.1%), poverty, employment, and welfare (17.9%), digital transformation (15.8%), financial access (13.7%), and regulation or stability (6.3%). Community-oriented institutions helped provide access benefits, removed information barriers, and advocated for enterprise development, employment, empowerment, and poverty alleviation. However, the circumstances were based on affordability, productive use of credit, literacy, infrastructure, governance, consumer protection, and regulatory stability. There is a need for more robust longitudinal and comparative evidence for greater confidence in causality and regional generalisability.