Financial Inclusion Convergence in Low-Income and Lower-Middle-Income Countries

Abstract

The study used interest rate, exchange rate and banks size as variables of study. The panel data of 22 Pakistan commercial banks about2009 to 2020, STATA Panel Ordinary Least Square (OLS) and general methods of moments (GMM) estimator is used, and results indicate that in Pakistani banks management efficiency is has high power over shareholder to make profits and involve in risk taking projects. Bank size increase highlights better performance but and a disadvantage to use funds in investments for future growth. Diversification in banks is not a helpful factor to bring change in risk portfolios during financial crises. The liquidity inverse relation causes less availability of resource to boost financial performance and default lending result in credit risk. High proportion of assets utilized for personnel expense raise risk-taking ratio for operation in Pakistan. Banks should avoid the adverse selection of risks with proper performance policy, as to safeguard from hostile economic situations.