Determinants of Financial Inclusion in Asia

Abstract

Financial inclusion, defined as the use of formal financial services, is one of the major determinants of economic development. Being financially included allows individuals to relax constraints associated with investment in education and with launching a business. Financial inclusion thus fosters growth and reduces poverty (Beck et al. 2007; Bruhn and Love 2014). It permits individuals to save money and thus reduces uncertainty of income, but it also contributes to financial stability, as more frequent use of bank deposits creates a more stable deposit base for banks in troubled times (Han and Melecky 2013).