Does financial inclusion enhance or weaken financial stability? Exploring their relationship in Latin American countries
Summary
This study investigates the effect of financial inclusion on financial stability in Latin American countries during the period 2004-2021, since governments in this region have intensified their efforts to promote financial inclusion policies after the global financial crisis. By using a random effects model, a positive significant effect of the financial inclusion index on financial stability, measured by the Z-Score, is observed for 11 Latin American countries during this sample period. This result is robust with the NPL ratio as a dependent variable, which reflects the degree of financial instability. Furthermore, similar findings are obtained when replacing the financial inclusion index with the usage and penetration dimension of financial inclusion. The results, which are consistent with the findings of previous studies, can be mainly explained by three key benefits that financial inclusion brings to financial stability. These include the diversification of bank’s loan portfolio, a stable retail base of deposits, as well as the lower costs of funding associated with the growth of retail deposits.
Collections
Related items
Showing items related by title, author, creator and subject.
-
Unveiling the Impact of ESG Controversy Scores on Financial Performance - Assessing the Financial Repercussions of ESG Controversies in the North American Financial Sector
Macchiarella, Valerio (2024)This thesis aims to analyse the relationship between ESG Controversy Scores and financial performance of financial firms operating in North America, using ROE and ROA as proxies of economic results. To establish the ... -
Financial Coercion in an Interdependent World: The United States’ Exploitation of the British Empire’s Financial System and Britain’s Subsequent Withdrawal from the Suez Crisis in 1956
Beesley, J.J.E. (2020)This thesis undertakes an analysis of Britain’s economic, financial, and military relationships with Iran, the United States, and the sterling area from 1901 to 1956, asking how American financial coercion led to the erosion ... -
The Financial Farmer, financial education and extension to Dutch farmers, 1890-1940
Hendrikx, D.W.J. (2018)The thesis investigates the development of financial and economic extension to Dutch farmers as a constant factor within modernising Dutch agriculture. Despite academic literature suggesting Dutch farming became agri-business ...