Financial inclusion and sustainability in Asia using Bank-level statistics

Abstract

Abstract The promotion of shared prosperity, economic success, and the expansion of the financial sector all contribute to individual development supported by financial inclusion. In recent years, it has been a crucial component in helping to contribute to the relief of poverty and the acceleration of economic growth. Because of financial intermediation, millions of persons who do not have bank accounts will have access to a broad range of low-cost financial products and services and be able to use such goods and services effectively. Financial inclusion in the Asian area is generally considered relatively low. In addition, the issue of financial intermediation has been largely overlooked in the overwhelming majority of modern educational research that has been carried out on the subject. The governments in the area have voiced significant worries about the possibilities for economic turbulence brought on by widespread financial inclusion. As a result, the purpose of this study is to explore the connection between the accessibility of financial services and the dependability of the financial sector. To accomplish so, we will use a database that incorporates information obtained from 3071 financial institutions based in Asia throughout the period 2008–2017. In this study, we use a technique known as the generalized moment approach (GMM). Based on the results of this research, it is clear that a more equitable distribution of wealth may be achieved by expanding access to financial services, which strengthens the banking system's capacity to weather shocks. The fact that a more comprehensive monetary inclusion may be attained through increasing access to financial services lends credence to this view. Financial institutions might benefit from integration into the financial system by increasing profits, decreasing operational expenses, and increasing market share. Several directions for further research have been proposed based on the results of this work.