Open Access Journal Article

Effects of Financial Inclusion on Economic Growth: Evidence from MENA Countries

by A. Talha Yalta a  and  A. Yasemin Yalta b,*
a
Department of Economics, TOBB University of Economics and Technology, Ankara, Turkey
b
Department of Economics, Hacettepe University, Ankara, Turkey
*
Author to whom correspondence should be addressed.
JRE  2024 3(1):15; https://doi.org/10.58567/jre03010004
Received: 26 June 2024 / Accepted: 22 October 2024 / Published Online: 10 January 2025
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Abstract

In recent years, financial inclusion has taken center stage in policy discussions regarding achieving higher growth rates and reducing poverty levels. The existing literature analyzing the relationship between financial inclusion and GDP growth mostly assumes a one-way relation from financial inclusion to GDP, often ignoring potential reverse causality. Furthermore, the literature commonly adopts a financial inclusion index, or focuses on specific indicators such as the number of bank branches, ATMs or the share of people having an account. Because financial inclusion encompasses multiple dimensions, it is important to analyze the causal linkages between different financial inclusion indicators and GDP. In this paper, we analyze the nature and the direction of the causality between GDP and a large number of financial inclusion indicators for MENA (Middle East and North Africa) countries by adopting the recently developed nonlinear and nonparametric Kernel causality approach. Our analysis suggests that financial inclusion increases as the share of women having bank accounts increases. It also increases with the share of adults with primary education having an account and the share of adults having a mobile account. We also identify the relationship between main barriers to financial inclusion and GDP, and find that affordability and having insufficient funds are associated with GDP.

Keywords: Financial Inclusion; Economic Growth; Kernel Causality; Middle East and North Africa;
Copyright: © 2025 by Yalta and Yalta. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

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ACS Style
Yalta, A. T.; Yalta, A. Y. Effects of Financial Inclusion on Economic Growth: Evidence from MENA Countries. Journal of Regional Economics, 2024, 3, 15. https://doi.org/10.58567/jre03010004
AMA Style
Yalta A T, Yalta A Y. Effects of Financial Inclusion on Economic Growth: Evidence from MENA Countries. Journal of Regional Economics; 2024, 3(1):15. https://doi.org/10.58567/jre03010004
Chicago/Turabian Style
Yalta, A. T.; Yalta, A. Y. 2024. "Effects of Financial Inclusion on Economic Growth: Evidence from MENA Countries" Journal of Regional Economics 3, no.1:15. https://doi.org/10.58567/jre03010004
APA style
Yalta, A. T., & Yalta, A. Y. (2024). Effects of Financial Inclusion on Economic Growth: Evidence from MENA Countries. Journal of Regional Economics, 3(1), 15. https://doi.org/10.58567/jre03010004

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