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The Impact of Financial Inclusion on Economic Growth and Social Development in the Hashemite Kingdom of Jordan

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  • Dina Azzam Alshanty

    (Financial Consumer Protection Department, Central Bank of Jordan)

Abstract

Purpose: Based on available detailed data, the primary objective of this study is to assess the relationship between financial inclusion and economic growth & social development in the Hashemite Kingdom of Jordan, then accord relevant recommendations to prompt economic growth and social development. Methodology: This study’s methodological approach is based on data analysis from 2007 to 2020, which was performed using a descriptive statistical approach, regression, and correlation analysis (i.e. the Pearson correlation). Findings: Findings reveal a significant relationship between financial inclusion and both economic growth and social development, implying that increasing financial inclusion may lead to an increase in economic growth and social development. In addition, that the Central Bank of Jordan and financial institutions have to continue their work on developing appropriate financial products and services for all segments of society, as well as on enhancing financial literacy, which can benefit in two ways: making more informed financial decisions and using the financial products and services responsibly. Practical implications: According to the findings of the study, encouraging more people to use financial products and services and expanding formal financial access can boost Jordan’s economic growth and social development. The Jordanian policy makers should continue down the same path of prioritizing financial inclusion because they have already engaged all key stakeholders in the financial system. Originality/value: The study demonstrates the link between financial inclusion and financial development in Jordan and emphasizes the importance of policymakers and financial institutions in designing and implementing projects and initiatives to increase access to financial services.

Suggested Citation

  • Dina Azzam Alshanty, 2022. "The Impact of Financial Inclusion on Economic Growth and Social Development in the Hashemite Kingdom of Jordan," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(7), pages 368-375, July.
    • Handle: RePEc:bcp:journl:v:6:y:2022:i:7:p:368-375
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    References listed on IDEAS

    as
    1. Ratna Sahay & Martin Cihak & Papa M N'Diaye & Adolfo Barajas & Srobona Mitra & Annette J Kyobe & Yen N Mooi & Seyed Reza Yousefi, 2015. "Financial Inclusion; Can it Meet Multiple Macroeconomic Goals?," IMF Staff Discussion Notes 15/17, International Monetary Fund.
    2. Ms. Ratna Sahay & Mr. Martin Cihak & Mr. Papa M N'Diaye & Mr. Adolfo Barajas & Ms. Srobona Mitra & Ms. Annette J Kyobe & Yen N Mooi & Mr. Seyed Reza Yousefi, 2015. "Financial Inclusion: Can it Meet Multiple Macroeconomic Goals?," IMF Staff Discussion Notes 2015/017, International Monetary Fund.
    3. Jong-Hee Kim, 2016. "A Study on the Effect of Financial Inclusion on the Relationship Between Income Inequality and Economic Growth," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 52(2), pages 498-512, February.
    4. Demirguc-Kunt,Asli & Klapper,Leora & Singer,Dorothe & Van Oudheusden,Peter, 2015. "The Global Findex Database 2014 : measuring financial inclusion around the world," Policy Research Working Paper Series 7255, The World Bank.
    5. Noha Emara & Mahmoud Mohieldin, 2020. "Financial inclusion and extreme poverty in the MENA region: a gap analysis approach," Review of Economics and Political Science, Emerald Group Publishing Limited, vol. 5(3), pages 207-230, July.
    6. Iftikhar Khan & Ismail Khan & Aziz Ullah Sayal & Muhammad Zubair Khan, 2021. "Does financial inclusion induce poverty, income inequality, and financial stability: empirical evidence from the 54 African countries?," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 49(2), pages 303-314, March.
    7. repec:eme:reps00:reps-03-2020-0041 is not listed on IDEAS
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