The Significance of Female Financial Inclusion for Development: An Empirical Investigation

Abstract

The main objective of this study is to understand how crucial financial inclusion of females is for overall development. The study suggests that female financial inclusion may be linked to improvements in women’s living standards and, by extension, to positive impacts on society as a whole. In order to test the claim, the study used global female data from Global Findex (2021) database. Using pooled Ordinary Least Square (Pooled OLS) estimation technique, the empirical investigation suggests that female financial inclusion is significantly associated with higher levels of human development. Most constituent elements of Human Development Index (HDI) are found to be positively correlated with female financial inclusion, except health. Moreover, heterogeneity analysis was conducted by both income and regional classification. Using interaction terms and sub-sample regressions, we find that the association is strongest in lower-middle income countries and in South Asia region. However, it is weaker or negative in some low-income and Sub-Saharan African region. Based on the results, we presented the possible measures to enhance female financial inclusion, while acknowledging that these should be viewed as indicative rather than definitive.