Ozili, Peterson K (2022) Does Economic Policy Uncertainty Reduce Financial Inclusion? International Journal of Banking and Finance (IJBF), 17 (1). pp. 53-80. ISSN 2590-423X

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Abstract

This study investigates whether the level of economic policy uncertainty (EPU) would reduce the level of financial inclusion. It was predicted that a high level of EPU could have a negative effect on the level of financial inclusion. It was argued that a high level of EPU would discourage financial institutions from providing basic financial services to low end customers and unbanked adults, and this would lead to a decrease in the level of financial inclusion. Using a sample of 22 countries, the study found that the level of EPU did not have a significant impact on financial inclusion. None of the nine indicators of financial inclusion were found to have a significant direct relationship with EPU. However, there was some evidence that the combined effect of a high level of EPU and high nonperforming loans could reduce financial inclusion, particularly through bank branch contraction and a reduction in the use of electronic payments. Furthermore, the use of formal accounts and credit cards would increase in times of high credit supply and when there was a high level of EPU.

Item Type:	Article
Uncontrolled Keywords:	Financial inclusion, policy uncertainty, economic policy uncertainty, non-performing loan, unbanked adults
Subjects:	H Social Sciences > HG Finance
Divisions:	School of Economics, Finance & Banking
Depositing User:	Mrs Nurin Jazlina Hamid
Date Deposited:	05 Mar 2023 08:32
Last Modified:	05 Mar 2023 08:32
URI:	https://repo.uum.edu.my/id/eprint/29212

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