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Empowering Stability: Unveiling the Link between Financial Inclusion and Bank Resilience: A Comprehensive Review

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  • Yeboah, Samuel

Abstract

This systematic review examines the link between financial inclusion (FI) and bank stability (BS). FI, defined as access to and usage of formal financial services by individuals and businesses, has gained significant attention as a policy goal in many countries. BS, on the other hand, is a critical aspect of financial system resilience and plays a key role in promoting economic growth and stability. The review synthesizes the existing literature to understand the potential linkages, mechanisms, and empirical evidence regarding the link between FI and BS. The findings highlight the complex nature of this link, with both positive and negative implications for BS arising from increased FI. The review concludes with policy implications and directions for future research.

Suggested Citation

  • Yeboah, Samuel, 2023. "Empowering Stability: Unveiling the Link between Financial Inclusion and Bank Resilience: A Comprehensive Review," MPRA Paper 117547, University Library of Munich, Germany, revised 24 May 2023.
    • Handle: RePEc:pra:mprapa:117547
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    References listed on IDEAS

    as
    1. Martin Cihak & Asli Demirguc-Kunt & Erik Feyen & Ross Levine, 2013. "Financial Development in 205 Economies, 1960 to 2010," Journal of Financial Perspectives, EY Global FS Institute, vol. 1(2), pages 17-36.
    2. Franklin Allen & Elena Carletti & Robert Cull & Jun ‘QJ’ Qian & Lemma Senbet & Patricio Valenzuela, 2014. "The African Financial Development and Financial Inclusion Gaps," Journal of African Economies, Centre for the Study of African Economies, vol. 23(5), pages 614-642.
    3. Beck, Thorsten & Demirguc-Kunt, Asli & Martinez Peria, Maria Soledad, 2007. "Reaching out: Access to and use of banking services across countries," Journal of Financial Economics, Elsevier, vol. 85(1), pages 234-266, July.
    4. Claessens, Stijn & Laeven, Luc, 2004. "What Drives Bank Competition? Some International Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(3), pages 563-583, June.
    5. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    6. Thorsten Beck & Asli Demirgüç-Kunt & Ross Levine, 2007. "Finance, inequality and the poor," Journal of Economic Growth, Springer, vol. 12(1), pages 27-49, March.
    7. Honohan, Patrick, 2008. "Cross-country variation in household access to financial services," Journal of Banking & Finance, Elsevier, vol. 32(11), pages 2493-2500, November.
    8. Demirguc-Kunt, Asli & Klapper, Leora, 2012. "Financial inclusion in Africa : an overview," Policy Research Working Paper Series 6088, The World Bank.
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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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