ARTICLE

THE IMPACT OF FINANCIAL INCLUSION ON THE ECONOMIC GROWTH OF PAKISTAN EVIDENCE FROM PAKISTAN

  1. HOME
  2. ARTICLE

01 Pages : 1-19

http://dx.doi.org/10.31703/gmsr.2022(VII-I).01      10.31703/gmsr.2022(VII-I).01      Published : Dec 2022

The Impact of Financial Inclusion on the Economic Growth of Pakistan: Evidence from Pakistan

Abstract

    The core objective of this research work is to explorer the link of financial inclusion with the economic growth of Pakistan. The data for this research is too collected from the time period of 2010 – 2021. The main dependent variable of this research study is economic growth (% GPD OF Pakistan). Financial inclusion was measure through the financial inclusion indicator. The research works found that financial inclusion has positive and significant influence on economic growth. The research work suggest to the policy maker that accelerate the financial inclusion inductors and enhance economic growth.

    Financial Inclusion, Economic Growth and Pakistan

    (1) Muhammad Najeeb
    MPhil Scholar, Department of Islamic Banking & Finance, University of Management and Technology, Lahore, Punjab, Pakistan
    (2) Talat Hussain
    Associate Professor, Department of Islamic Banking & Finance, University of Management and Technology, Lahore, Punjab, Pakistan.
Fulltext PDF

References

  • Abu-Bader, S., & Abu-Qarn, A. S. (2008). Financial development and economic growth: empirical evidence from six MENA countries. Review of Development Economics, 12(4), 803-817. https://doi.org/10.1111/j.1467-9361.2008.00427.x
  • Afolabi, M. O. (2013). Growth effect of small and medium enterprises (SMEs) financing in Nigeria. Journal of African Macroeconomic Review, 3(1), https://doi.org/10.1108/REPS-07-2020-0089
  • Ahmed, S. M., & Ansari, M. I. (1998). Financial sector development and economic growth: The South-Asian experience. Journal of Asian Economics, 9(3), 503-517. https://doi.org/10.1016/S1049-0078(99)80100-6
  • Ardic, O. P., & Damar, H. E. (2006). Financial Sector Deepening and Economic Growth: Evidence from Turkey. Topics in Middle Eastern and North African Economies (MEEA Online Journal). https://mpra.ub.uni-muenchen.de/id/eprint/4077
  • Amrullah, A. (2017). Relationship of family role with puskesmas services in family members that suffer kusta disease. Muhammadiyah Nursing Journal , 1(1), 72-78.
  • Beck, T., Demirgüc-Kunt, A., & Levine, R. (2007). Finance, Inequality and the Poor, Journal of
  • Economic Growth 12, 27–49. https://www.jstor.org/stable/40216113
  • Ben Naceur, S. (2014). Access to finance for small and medium-sized enterprises in the MENAP and CCA regions. International Monetary Fund. https://www.imf.org/external/pubs/ft/reo/2014/mcd/eng/
  • Bigirimana, M., & Hongyi, X. (2018). Research on Relationship between Financial Inclusion and Economic Growth of Rwanda: Evidence from Commercial Banks with ARDL Approach. International Journal of Innovation and Economic Development, 4(1),7-18. https://doi.org/10.18775/ijied.1849-7551-7020.2015.41.2001
  • Brito, D. L., & Hartley P. R. (1995). “Consumer Rationality and Credit Cards”, Journal of Political Economy, 103, 400-33. https://www.jstor.org/stable/2138645
  • Bruhn, M., & Love, I. (2014). The real impact of improved access to finance: Evidence from Mexico. The Journal of Finance, 69(3), 1347-1376. https://doi.org/10.1111/jofi.12091
  • Cameron, R. E. (1967). Banking in the early stages of industrialization: a study in comparative economic history. New York: Oxford University Press.
  • Chami, R., Fullenkamp, C., & Jahjah, S. (2005). ‘Are Immigrant Remittance Flows a Source of Capital for Development?’. Washington, DC: IMF.
  • Chapra, M. U. (1979). Objectives of the Islamic Economic Order, The Islamic Foundation, Leicester.
  • Chaudhry, M. S. (1999). Fundamentals of Islamic Economic System, Burhan Education and Welfare Trust, Lahore.
  • Chow, K. M., & Li, P. K. T. (2012). Dialysis: Choice of dialysis—what to do with economic incentives. Nature Reviews Nephrology, 8(9), 495. https://www.jstor.org/stable/43611187
  • Collins, D., Murdoch, J., Rutherford, S., & Ruthven, O. (2009). Portfolios of the Poor: How the world's poor live on $ 2 a day, (Princeton, N.J: Princeton University Press).
  • Columba, F. (2009), “Narrow money and transaction technology: new disaggregated evidence”, Journal of Economics and Business, 61, 312-325. https://doi.org/10.1016/j.jeconbus.2009.01.001
  • Convoy, J. (2005). APEC and Financial Inclusion: Missed Opportunities for Collective Action? Assia-Pacific Development Journal, 12(1), https://doi.org/10.18356/339ee7fc-en
  • Daly, S., & Frikha, M. (2016). Banks and economic growth in developing countries: What about Islamic banks?. Cogent Economics & Finance, 4(1), 1168728. https://doi.org/10.1108/IES-05-2020-0016
  • Demetriades, P. O., & Luintel, K. B. (1996). Financial development, economic growth and banking sector controls: evidence from India. The Economic Journal, 106(435), 359- 374. https://doi.org/10.2307/2235252
  • Demirguc-Kunt, A., & Klapper, L. (2012). Measuring financial inclusion: The global findex database. The World Bank.
  • Demirguc-Kunt, A., & Levine, R. E. (2008). Finance Financial sector policies, and Long Run
  • Growth" M. sperce Growth commission Background paper, No 11 Washington, D. C. world Bank.
  • Drehmann, M., Goodhart, C., & Krueger, M. (2002). The Challenges Facing Currency Usage: Will the Traditional Transaction Medium Be Able to Resist Competition from the New Technologies?, Economic Policy – a European Forum, 17(34), 193–228. https://doi.org/10.1111/1468-0327.00087
  • Evans, O. (2015). The effects of economic and financial development on financial inclusion in Africa.
  • Gardeva, A. & Rhyne, E. (2011). Opportunities and Obstacles to Financial Inclusion Survey
  • Report. Center for Financial Inclusion Publication
  • Goldberger, J. J., Bonow, R. O., Cuffe, M., Dyer, A., Greenland, P., Rosenberg, Y., & Smith, S. (2008). Post–myocardial infarction β- blocker therapy: The bradycardia conundrum. Rationale and design for the Pacemaker & β-blocker therapy post-MI (PACE-MI) trial. American heart journal, 155(3), 455-464. https://doi.org/10.1016/j.ahj.2007.10.041
  • Han, R., & Melecky, M. (2013). Financial Inclusion for Financial Stability: Access to Bank Deposits and the Growth of Deposits in the Global Financial Crisis. World Bank Policy Research Working Paper 6577, World Bank
  • Hariharan, G., & Marktanner, M. (2012). The growth potential from financial inclusion. ICA Institute and Kennesaw State University.
  • Hasan, I., De Renzis, T., & Schmiedel, H. (2012). Retail payments and economic growth. https://doi.org/10.2139/ssrn.2100651
  • Humphrey, D. B., Pulley, L. B., & Vesala, J. M. (1996). “Cash, Paper and Electronic Payments: A Cross-Country Analysis”. Journal of Money, Credit and Banking, 28, 914- 39. https://doi.org/10.2307/2077928
  • Ifeakachukwu, N. P., & Olasunkanmi, O. I. (2013). The impact of banks loan to SMES on manufacturing output in Nigeria. Journal of Social and Development Sciences, 4(5), 212– 217. https://doi.org/10.22610/jsds.v4i5.754
  • Joseph, J., & Varghese, T. (2014). Role of financial inclusion in the development of Indian economy. Journal of Economics and Sustainable Development 5, 6-13.
  • Kothari, C. R. (2004). Research methodology: Methods and techniques. New Age International. Kim, D. W., Yu, J. S., & Hassan, M. K. (2018). Financial inclusion and economic growth in OIC countries. Research in International Business and Finance, 43, 1-14. https://doi.org/10.1016/j.ribaf.2017.07.178
  • Kim, J. (2018). Philosophy of mind. Routledge.
  • Khan, M. A. (2008). Financial development and economic growth in Pakistan: evidence based on autoregressive distributed lag (ARDL) approach. South Asia Economic Journal, 9(2), 375-391. https://doi.org/10.1177/139156140800900206
  • Laldin, M. A., & Furqani, H. (2013). ‘Developing Islamic finance in the framework of Maqasid alShari’ah: understanding the ends (Maqasid) and the means (Wasa’il)’, International Journal of Islamic and Middle Eastern Finance and Management, 6(4), 278– 289.
  • Levine, R. (2003). Finance and Growth: Theory, Evidence and Mechanisms. Minnesota: University of Minnesota and NBER.
  • Levine, R. E. (2005). "Finance and Growth: Theory and Evidence" In Philippe Aghion and Steven Daurlauf (ed); Handbook of Economic Growth Amsterdam: North Holland Elsevier Publishers.
  • Levine, R., & Zervous, S. (1998). Stock Markets, Banks and Economic Growth, American Economic Review, 88, 537-558. https://www.jstor.org/stable/116848
  • Leyshon, A., & Thrift, N. (1995). "Geographies of financial exclusion: financial abandonment in Britain and the United States" Transactions of the Institute of British Geographers, New Series 20(3), 312-341 https://doi.org/10.2307/622654
  • Mandel, B. R., & Seydl, J. (2016). Credit conditions and economic growth: Recent evidence from US banks. Economics Letters, 147, 63-67. https://doi.org/10.1016/j.econlet.2016.08.017
  • Martinez M. V. (2011). The Political Economy of Increased Financial Access. A Thesis Submitted in Partial Fulfilment of The Requirement for The Degree of Master of Public Policy to the Faculty of the Graduate School of Arts and Sciences of Georgetown University.
  • McCloskey, T. W., Ott, M., Tribble, E., Khan, S. A., Teichberg, S., Paul, M. O., & Chirmule, N. (1997). Dual role of HIV Tat in regulation of apoptosis in T cells. The Journal of Immunology, 158(2), 1014-1019
  • Michael, O. B., & Sharon, O. O. (2014). Financial system, financial inclusion and economic development in Nigeria. International Journal of Management Sciences, 2(3), 139-148.
  • Mohieldin, M., Iqbal, Z., Rostom, A.M. and Fu, X. (2011). The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries, Policy Research Working Paper 5920, World Bank, Washington, DC.
  • Nkwede, F. (2015). Financial inclusion and economic growth in Africa: Insight from Nigeria. European Journal of Business and Management, 7(35), 71-80.
  • Obstfeld, M. (1994). "Risk, Diversification, and Growth". The American Economic Review, 8(5), 1310-1329.
  • Okoye, L. U., Erin, O., & Modebe, N. J. (2017). Financial inclusion as a strategy for enhanced economic growth and development. The Journal of Internet Banking and Commerce, 1-14. https://doi.org/10.47067/reads.v6i1.195
  • Omojolaibi, J. A. (2017). Financial Inclusion, Governance and Economic Progress inNigeria: What Happens to the Welfare of the Poor?. Oman Chapter of Arabian Journal of Business and Management Review, 34(93), 1- 14. https://doi.org/10.12816/0036845
  • Onaolapo, A. R. (2015). Effects of financial inclusion on the economic growth of Nigeria (1982-2012). International Journal of Business and Management Review, 3(8), 11-28.
  • Osoba, A. M. (1987). Small-Scale Enterprises in the Development Process, In Osoba, A.M. (Eds.). Towards the Development of Small- Scale Industries in Nigeria, NISER, Ibadan. 8- 24
  • Rafindadi, A. A., & Yusof, Z. (2013). Is financial development a factor to the leading growth profile of the South African economy? Measuring and uncovering the hidden secret. International Journal of Economics and Empirical Research (IJEER), 1(9), 99-112.
  • Rajan, R. G., & Zingales, L. (2003). Saving Capitalism from Capitalists, Crown Business, New York
  • Rangarajan, C. (2008). Report of the Committee on Financial inclusion. Government of India. Rostow, W. W., & Rostow, W. W. (1990). The stages of economic growth: A non-communist manifesto. Cambridge university press.
  • Sampson, D. (2012). Definitions of Economic Development: International Economic Development Council (IEDC) http://www.iedconline.org/hotlinks/whtecodev.html
  • Sarma, M., & Pais, J. (2010). Financial inclusion and development: A cross country analysis, Indian Council for Research on International Economic Relations, 1-28. https://doi.org/10.1080/09638199.2020.1785532
  • Åžendeniz-Yüncü, Ä°., Akdeniz, L., & AydoÄŸan, K. (2007). Futures market development and economic growth (pp. 1-44). Working Paper Series Bilkent University.
  • Shaikh, S. A. (2018). Role of Islamic banking in financial inclusiveness in Pakistan: promise, performance and prospects. International Journal of FinancialServices Management, 9(1), 88-102. https://doi.org/10.1504/IJFSM.2018.10011052
  • Sharma, D. (2016). Nexus between financial inclusion and economic growth: evidence from the emerging Indian economy. Journal of Financial Economic Policy, 8(1), 13-36. https://doi.org/10.1108/JFEP-01-2015-0004
  • Shihadeh, F. H., Hannon, A., Guan, J., Haq, I. U., & Wang, X. (2018). Does Financial Inclusion Improve the Banks’ Performance? Evidence from Jordan. In Global Tensions in Financial Markets (117-138). Emerald Publishing Limited. https://doi.org/10.1108/S0196-382120170000034005
  • Snellman, J. S., Vesala J., Humphrey, D. B. (2001). Substitution of Noncash Payment Instruments for Cash in Europe, Journal of Financial Services Research, 19 (2/3), 131-145. https://doi.org/10.2139/ssrn.312965
  • State bank of Pakistan (SBP) What is Financial Inclusion? See for further http://www.sbp.org.pk/Finc/About.asp
  • Stahl, C. W., & Arnold, F. (1986). ‘Overseas Workers’ Remittances in Asian Development’. International MigrationReview, 20(4), 899-925. https://doi.org/10.2307/2545742
  • Stijn, C., Patrick, H., & Liliana, R. (2009). Policy Principles for Expanding Financial Access. Journal of international development, 28, 75-90. Swamy, V. (2012). Bank-based financial intermediation for financial inclusion and inclusive growth. https://mpra.ub.uni-muenchen.de/49602/
  • Vaithilingam, S., Guru, B. K., & Shanmugam, B. (2003). Bank lending and economic growth in Malaysia. Journal of Asia-Pacific Business, 5(1), 51-69. https://doi.org/10.1300/J098v05n01_05
  • Wang, X. h., & Shihadeh, F. h. (2015). Financial inclusion: policies, status, and challenges in Palestine. International Journal of Economics and Finance, 7(8), 196–207. https://doi.org/10.5539/ijef.v7n8p196
  • World Bank. (1993). The East Asian Miracle: Economic Growth and Public Policy, New York:
  • Xu, Z. (2000). Financial development, investment, and economic growth. Economic inquiry, 38(2), 331-344. https://doi.org/10.1108/JEFAS-12-2017-0125

Cite this article

APA

    APA : Najeeb, M., & Hussain, T. (2022). The Impact of Financial Inclusion on the Economic Growth of Pakistan: Evidence from Pakistan. Global Management Sciences Review, VII(I), 1-19. https://doi.org/10.31703/gmsr.2022(VII-I).01

CHICAGO

    CHICAGO : Najeeb, Muhammad, and Talat Hussain. 2022. "The Impact of Financial Inclusion on the Economic Growth of Pakistan: Evidence from Pakistan." Global Management Sciences Review, VII (I): 1-19 doi: 10.31703/gmsr.2022(VII-I).01

HARVARD

    HARVARD : NAJEEB, M. & HUSSAIN, T. 2022. The Impact of Financial Inclusion on the Economic Growth of Pakistan: Evidence from Pakistan. Global Management Sciences Review, VII, 1-19.

MHRA

    MHRA : Najeeb, Muhammad, and Talat Hussain. 2022. "The Impact of Financial Inclusion on the Economic Growth of Pakistan: Evidence from Pakistan." Global Management Sciences Review, VII: 1-19

MLA

    MLA : Najeeb, Muhammad, and Talat Hussain. "The Impact of Financial Inclusion on the Economic Growth of Pakistan: Evidence from Pakistan." Global Management Sciences Review, VII.I (2022): 1-19 Print.

OXFORD

    OXFORD : Najeeb, Muhammad and Hussain, Talat (2022), "The Impact of Financial Inclusion on the Economic Growth of Pakistan: Evidence from Pakistan", Global Management Sciences Review, VII (I), 1-19

TURABIAN

    TURABIAN : Najeeb, Muhammad, and Talat Hussain. "The Impact of Financial Inclusion on the Economic Growth of Pakistan: Evidence from Pakistan." Global Management Sciences Review VII, no. I (2022): 1-19. https://doi.org/10.31703/gmsr.2022(VII-I).01