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Publication type: Master thesis
Title: Determinants of financial inclusion in emerging Europe and Asia
Authors: Brauchli, Christian
Advisors / Reviewers: Rueda Maurer, Maria Clara
DOI: 10.21256/zhaw-24406
Extent: 61
Issue Date: 2021
Publisher / Ed. Institution: ZHAW Zürcher Hochschule für Angewandte Wissenschaften
Publisher / Ed. Institution: Winterthur
Language: English
Subject (DDC): 332: Financial economics
Abstract: Financial inclusion is said to reduce poverty and inequality and support economic growth. This makes financial inclusion a prominent enabler of several of the Sustainable Development Goals defined by the United Nations. At its core, the concept envisages that all segments of society have access to and make use of a wide range of financial services and products. Many countries have understood the importance of financial inclusion and have implemented policies and developed frameworks to support inclusion in recent years. However, about 1.7 billion adults globally were still considered as unbanked in 2017. The factors that determine inclusion at the micro-level have been subject to many studies in the recent past and are already well understood. At the macroeconomic level however, the factors that determine financial inclusion remain less well explored. The purpose of this thesis is to unveil the determinants of financial inclusion in Eastern Europe and Central Asia (EECA) in order to shed light on the different levels of success of the EECA countries in their efforts to increase financial inclusion. Using a binary output model, financial inclusion indicators, such as account ownership and savings, are linked with macroeconomic variable that were found in the literature to support financial development. The selected inclusion indicators, socioeconomic as well as macroeconomic variables are observed for the years 2011, 2014 and 2017 and the resulting panel data is then quantitatively analyzed using the probit regression model. Financial openness, trade openness, inflation, GDP per capita and borrower’s rights protection are all significant determinants of financial inclusion. However, the effect of these variables differs between account ownership and savings. While all macroeconomic variables studied in this thesis are positive and significant determinants for account ownership, only trade openness and GDP per capita positively influence savings. Financial openness, inflation and borrower’s rights protection have a negative effect on savings. Financial openness and inflation have the largest effect on account while trade openness is most relevant for savings. The results indicate that governments and policy makers in the EECA region can play an important role in increasing the level of financial inclusion. Dedicated policies influencing the relevant socio- and macroeconomic variables could be implemented to support each of the respective financial inclusion indicator.
License (according to publishing contract): CC BY-NC-ND 4.0: Attribution - Non commercial - No derivatives 4.0 International
Departement: School of Management and Law
Appears in collections:MSc Banking and Finance

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