Financial Inclusion's Effects on Asia's GDP, Poverty, Income Inequality, and Stability


  • Abid Hussain Ms Scholar Department of Management Science University of Lahore
  • Muhammad Ali Ms Scholar Department of Management Science University Of Lahore


Several countries have prioritized the inclusion of financial services on their policy agendas to promote sustainable development and enhance the well-being of their citizens. The aim of this research is to determine how financial inclusion impacts the stability of the financial system, income distribution, poverty levels, and economic growth rates in various Asian countries. Financial inclusion is quantified using three criteria. The criteria include banking penetration, accessibility of banking services, and consumption of banking services. Both the Gini coefficient and the poverty ratio, which measures the proportion of people falling below the federal poverty limit, serve as indicators for assessing poverty and economic inequality. The Z-score and the percentage of nonperforming loans are two indicators used to assess a bank's financial stability. The hypothesis test findings reveal that all aspects of financial stability significantly influence economic growth, poverty, and income inequality simultaneously. Additionally, they exert a significant influence on the stability of financial systems. However, the financial inclusion characteristic has had a limited impact on economic growth, income inequality, poverty alleviation, and financial stability in eleven Asian nations. When formulating plans to expand financial inclusion, it is incumbent upon governments of all nations to thoroughly examine and incorporate the findings obtained from the study. Only when this prerequisite is fulfilled, will policies aimed at promoting sustainable growth and enhancing public welfare be put into effect.

Keywords: Financial Inclusion, Economic Growth, Poverty, Income Inequality, Financial Stability