Do credit unions contribute to financial inclusion and local economic development? Empirical evidence from Poland

Abstract

Financial inclusion is currently on the political agenda of many governments and international institutions as an unavoidable objective of territorial cohesion and economic development programs. It is also central to the Sustainable Development Goals (SDGs). For their part, the role of credit unions as agents of local economic development and their commitment to the provision of financial services in regions subject to unfavorable demographic and economic stress has been verified by various studies. However, this article examines the contribution of credit unions to the processes of financial inclusion and economic development in Poland under a regional analysis approach. For this purpose, spatial analysis method is applied to a sample of 3,556 credit union bank branches representative of all Polish voivodeships to determine the distribution of these branches. Then, a model based on the research of Di Pietro (2016) and Coccorese and Shaffer (2018) is estimated to assess the impact of credit unions on the endogenous economic development of the territory. The obtained results suggest that credit unions have a significant influence on the local economic development of Polish voivodeships and contribute to the financial inclusion in these regions.