Financial Inclusion Trajectories: Geographical Dispersion, Convergence, and Development Implications

Abstract

The profound attempts to promote financial inclusion (FI) need more scrutiny for better policy insights. This paper, therefore, assesses the nature of FI in terms of geographical dispersion, convergence, and implications on development goals using various FI measures for a large cross-section of countries. The findings indicate that FI is multifaceted, accounting for a diverse geographical dispersion across countries in terms of financial access and use. FI, over the years, has progressed significantly while mobile money transition in developing countries shows a gradual progress, focusing on certain regions. We observe FI convergence across countries, albeit at a slower rate. FI can act as a tool for promoting income per capita and human development index, especially in developing countries. Nevertheless, the impact of FI on inequality is limited, requiring policymakers to formulate a better governance system to promote FI as a catalyst. Policy implications are further discussed.