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Can Regulation Promote Financial Inclusion ?

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  • Chen,Rong - DECID
  • Divanbeigi,Raian

Abstract

Despite the commitments of the development community toward broader access to finance, financial inclusion rates worldwide are rather unsatisfactory. To date, around two billion adults do not have access to basic financial services such as savings and checking accounts. Attempting to bridge such gap between policy objectives and outcomes, several economists have probed the determinants of financial inclusion. This paper contributes to the debate by investigating the role played by financial regulation. First, the paper proposes a broad index of regulatory quality for financial inclusion, emphasizing the role of nontraditional delivery models, for example, branchless banking, and actors, for example, nonbank lending institutions. Second, the paper tests the relationship between regulatory quality and financial inclusion outcomes. The analysis finds that in countries where regulatory quality is within the top quartile, individuals are 12.4 percent more likely to have an account at a financial institution with respect to bottom quartile countries.

Suggested Citation

  • Chen,Rong - DECID & Divanbeigi,Raian, 2019. "Can Regulation Promote Financial Inclusion ?," Policy Research Working Paper Series 8711, The World Bank.
    • Handle: RePEc:wbk:wbrwps:8711
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    File URL: http://documents.worldbank.org/curated/en/689111547822970149/pdf/WPS8711.pdf
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    Citations

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    Cited by:

    1. Neilson, Ben Oakley & Lee, Steven J., 2024. "Identifying the properties and impact of education on misconduct: Evidence from Australian financial advisers," International Journal of Educational Development, Elsevier, vol. 105(C).
    2. Alicia Girón & Amirreza Kazemikhasragh & Antonella Francesca Cicchiello & Eva Panetti, 2022. "Financial Inclusion Measurement in the Least Developed Countries in Asia and Africa," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 1198-1211, June.
    3. Ozili, Peterson K, 2020. "Social inclusion and financial inclusion: international evidence," MPRA Paper 101811, University Library of Munich, Germany.
    4. Ozili, Peterson Kitakogelu, 2021. "Financial inclusion-exclusion paradox: how banked adults become unbanked again," MPRA Paper 108494, University Library of Munich, Germany.
    5. Weidong Chen & Xiaohui Yuan, 2021. "Financial inclusion in China: an overview," Frontiers of Business Research in China, Springer, vol. 15(1), pages 1-21, December.
    6. Mohammed Al‐Hamdani & Kayla M. Joyce & Tristan Park & Megan E. Cowie & Sherry H. Stewart, 2021. "Cannabis packaging: An opportunity for facilitating informed decisions," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(3), pages 1150-1168, September.
    7. Ozili, Peterson K, 2020. "Financial inclusion research around the world: a review," MPRA Paper 101809, University Library of Munich, Germany.
    8. Ozili, Peterson K, 2020. "Financial inclusion and business cycles," MPRA Paper 102054, University Library of Munich, Germany.
    9. Ozili, Peterson K, 2023. "Can social inclusion policies promote financial inclusion?," MPRA Paper 116971, University Library of Munich, Germany.
    10. Ozili, Peterson K, 2020. "Financial inclusion and Fintech during COVID-19 crisis: Policy solutions," MPRA Paper 111219, University Library of Munich, Germany.

    More about this item

    Keywords

    Financial Structures; Financial Sector Policy; Microfinance; Rural Microfinance and SMEs; Banks&Banking Reform;
    All these keywords.

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