Determining the nexus between financial inclusion and economic development in Pakistan
| Pages | 195-209 |
| Date | 07 May 2019 |
| Published date | 07 May 2019 |
| DOI | https://doi.org/10.1108/JMLC-12-2017-0068 |
| Author | Muhammad Subtain Raza,Jun Tang,Sana Rubab,Xin Wen |
Determining the nexus between
financial inclusion and economic
development in Pakistan
Muhammad Subtain Raza
Habib Bank, Lahore, Pakistan
Jun Tang
Zhongnan University of Economics and Law, Wuhan, China
Sana Rubab
Habib Bank, Lahore, Pakistan, and
Xin Wen
Zhongnan University of Economics and Law, Wuhan, China
Abstract
Purpose –This paper aims to evaluate the relationship between financial inclusion and economic
development in Pakistan based on available sources of detailed data and assess its outcome of financial
inclusion on basic standards of life, then accord relevant recommendations to prompt economic growth
and development.
Design/methodology/approach –The research design selected for data analysis was meta-analysis,
besides, data analysis overthe period 2010-2015 was performed by using a descriptive statistical approach,
regressionand correlation analysis, i.e. the Pearson correlationmatrix.
Findings –The authors find a positive relationship between financial inclusion and economic
development, resultantly; increase in financial inclusion may lead to an increase in economic
development. In detail, the number of the number of bank accounts (per 1,000 adult population) and the
number of bank branches (per 100,000 people) have a positive relationship with human development
index (HDI). Where else the amount of automated teller machines per 1,000 km
2
(per cent) reveals a
negative relationship.
Practical implications –The study has shown that expand financial access such as strengthen the
establishment of bank accountsand bank branches can increase economic development in Pakistan.That is
the government shouldfocus on the financial inclusion policies as a meansof ameliorating poverty, through a
participation of all economic agents in the financialsystem. There is an utmost need for the Government of
Pakistanto prioritizethe importance of financial inclusion.
Originality/value –The novelty of the study is taken HDI and three representative indicators as a
measurement of economic growth and financial inclusion, respectively, meanwhile, meta-analysis,
multivariate regression modelsum up that poverty alleviation is connected with the development of a more
inclusivefinancial services sectors.
Keywords Pakistan, Financial inclusion, Human development index
Paper type Research paper
This work is supported by National Social Science Foundation of China Project (17BGJ020):
Studies on Regulation Capture of International AML System under Global Gonernance and
Chinese Solutions.
Economic
development
in Pakistan
195
Journalof Money Laundering
Control
Vol.22 No. 2, 2019
pp. 195-209
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-12-2017-0068
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