Abstract:
Promoting financial inclusion is essential for fostering social inclusivity, especially in tackling
poverty and income inequality by giving marginalizing groups opportunity. In 42 developing
countries, this research aims to investigate the impacts of decreasing poverty and wealth inequality
through financial inclusion, as well as its causes and conditional consequences. We create a novel
financial inclusion index using an imbalanced annual panel dataset with time intervals of 2011,
2014, 2017, and 2021. The index is based on a comprehensive set of parameters linked to financial
sector outreach. Our results show that the degree of financial inclusion in emerging nations is
highly influenced by variables such as per capita real GDP, owning credit card, borrowing for
education and and saving for old age at a financial institution. Additionally, our strong findings
offer convincing proof that, to some extent, financial inclusion considerably reduces poverty rates
and income inequality.
