Effects of Financial Inclusion on the Economic Growth of Developing Countries: An Empirical Analysis of the Bangladesh Economy

Abstract

Financial inclusion in its widest meaning refers to inexpensive access to an extensive variety of  financial facilities. These include banking products, insurance, stock investments, and other  financial services. Financial inclusion helps economic development by widening the financial  system's resource base and encouraging rural residents to save. It also helps the rural economy  grow. In this study, from 2011 to 2020, the connection between financial inclusion and economic  development is examined. Financial inclusion is assessed by the number of Automated Teller  Machines (ATMs) and the credit-deposit ratio (CDR), among other factors. Multiple regression  analysis was used to analyze secondary data, along with other approaches. Before analysis, the  data were checked for completeness and correctness. VIF and Durbin-Watson tests examined  multicollinearity and autocorrelation in the data. The study's policy implications include that  financial inclusion, in all of its forms, is determined to be one of the most important components  of economic development. The study focuses that the government and other policymakers must  strive to preserve and promote sustainable and inclusive growth, which may be achieved via the  expansion of financial inclusion. Furthermore, the results provide support to the government of  Bangladesh’s social banking initiatives, which are being carried out in order to promote financial  inclusion. The research found that ATMs significantly boost the country's GDP. Nonetheless, the  CDR has a little beneficial influence on the GDP.