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Financial inclusion and sustainable development: an empirical association

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  • Peterson K. Ozili

Abstract

Purpose - This paper aims to investigate the association between financial inclusion and sustainable development in a global context. Design/methodology/approach - The study used two datasets, and employed the Pearson correlation analysis and granger causality test to examine the correlation and pairwise causality between financial inclusion and sustainable development. Findings - High levels of financial inclusion (in terms of higher commercial bank branches per 100,000 adults) is significantly associated with higher electricity production from renewable sources, higher industry productivity, higher adult literacy rate and higher renewable electricity output. Also, higher financial inclusion is significantly associated with low combustible renewables and waste. There is a uni-directional granger causality between global interest in internet information about sustainable development and global interest in internet information about financial inclusion, particularly in the period after the global financial crisis but before the COVID-19 pandemic. Practical implications - The correlation between financial inclusion and sustainable development depends on the indicators employed to measure financial inclusion and sustainable development. The results support global calls for greater financial inclusion and the speedy attainment of the sustainable development goals for the good of all people, the environment and for the planet. Originality/value - This paper is the first study in the literature to analyze the link between financial inclusion and sustainable development using global data. This study contributes to the existing literature by investigating the association between financial inclusion and sustainable development in a global context.

Suggested Citation

  • Peterson K. Ozili, 2022. "Financial inclusion and sustainable development: an empirical association," Journal of Money and Business, Emerald Group Publishing Limited, vol. 2(2), pages 186-198, September.
    • Handle: RePEc:eme:jmbpps:jmb-03-2022-0019
    DOI: 10.1108/JMB-03-2022-0019
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    1. Grohmann, Antonia & Klühs, Theres & Menkhoff, Lukas, 2018. "Does financial literacy improve financial inclusion? Cross country evidence," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 111, pages 84-96.
    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. Ebenezer Bugri Anarfo & Joshua Yindenaba Abor & Kofi Achampong Osei & Agyapomaa Gyeke-Dako, 2019. "Financial inclusion and financial sector development in Sub-Saharan Africa: a panel VAR approach," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 15(4), pages 444-463, April.
    4. Dakhlia, Sami & Diallo, Boubacar & Temimi, Akram, 2021. "Financial inclusion and ethnic development: Evidence from satellite light density at night," Journal of Behavioral and Experimental Finance, Elsevier, vol. 29(C).
    5. Mr. Adrian Alter & Boriana Yontcheva, 2015. "Financial Inclusion and Development in the CEMAC," IMF Working Papers 2015/235, International Monetary Fund.
    6. Ogechi Adeola & Olaniyi Evans, 2017. "Financial inclusion, financial development, and economic diversification in Nigeria," Journal of Developing Areas, Tennessee State University, College of Business, vol. 51(3), pages 1-15, July-Sept.
    7. Dabla-Norris, Era & Ji, Yan & Townsend, Robert M. & Filiz Unsal, D., 2021. "Distinguishing constraints on financial inclusion and their impact on GDP, TFP, and the distribution of income," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 1-18.
    8. Leonardo Salvatore Alaimo & Andrea Ciacci & Enrico Ivaldi, 2021. "Measuring Sustainable Development by Non-aggregative Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 157(1), pages 101-122, August.
    9. Ebenezer Bugri Anarfo & Joshua Yindenaba Abor & Kofi Achampong Osei & Agyapomaa Gyeke-Dako, 2019. "Financial inclusion and financial sector development in Sub-Saharan Africa: a panel VAR approach," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 15(4), pages 444-463, April.
    10. Antonella Francesca Cicchiello & Amirreza Kazemikhasragh & Stefano Monferrá & Alicia Girón, 2021. "Financial inclusion and development in the least developed countries in Asia and Africa," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-13, December.
    11. Yilmaz Bayar & Mehmet Hilmi Ozkaya & Laura Herta & Marius Dan Gavriletea, 2021. "Financial Development, Financial Inclusion and Primary Energy Use: Evidence from the European Union Transition Economies," Energies, MDPI, vol. 14(12), pages 1-14, June.
    12. Anarfo, Ebenezer Bugri & Abor, Joshua Yindenaba & osei, Kofi Achampong, 2020. "Financial regulation and financial inclusion in Sub-Saharan Africa: Does financial stability play a moderating role?," Research in International Business and Finance, Elsevier, vol. 51(C).
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    Cited by:

    1. Bu, Fan & wu, Hong & Mahmoud, Haitham A. & Alzoubi, Haitham M. & Ramazanovna, Nargiza Kuzieva & Gao, Yirui, 2023. "Do financial inclusion, natural resources and urbanization affect the sustainable environment in emerging economies," Resources Policy, Elsevier, vol. 87(PA).
    2. Peterson K. Ozili, 2023. "Using Central Bank Digital Currency to Achieve the Sustainable Development Goals," Contemporary Studies in Economic and Financial Analysis, in: Digital Transformation, Strategic Resilience, Cyber Security and Risk Management, volume 111, pages 143-153, Emerald Group Publishing Limited.
    3. Tuwe Soro Garbobiya & Olajide Oladipo & Paul Terhemba Iorember, 2024. "Financial inclusion and monetary policy targets: Evidence from the ECOWAS countries," Modern Finance, Modern Finance Institute, vol. 2(1), pages 84-100.

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    More about this item

    Keywords

    Financial inclusion; Sustainable development goals; Access to finance; Energy; Renewables; Adult literacy; Industry; Electricity; Access to finance; Unbanked adults; Environment;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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