Sha'ban, Main and Girardone, Claudia and Sarkisyan, Anna and Arun, Thankom (2023) On the Relationship between Financial Inclusion and Bank Performance. Economic Notes: Review of Banking, Finance and Monetary Economics, 52 (3). DOI https://doi.org/10.1111/ecno.12225
Sha'ban, Main and Girardone, Claudia and Sarkisyan, Anna and Arun, Thankom (2023) On the Relationship between Financial Inclusion and Bank Performance. Economic Notes: Review of Banking, Finance and Monetary Economics, 52 (3). DOI https://doi.org/10.1111/ecno.12225
Sha'ban, Main and Girardone, Claudia and Sarkisyan, Anna and Arun, Thankom (2023) On the Relationship between Financial Inclusion and Bank Performance. Economic Notes: Review of Banking, Finance and Monetary Economics, 52 (3). DOI https://doi.org/10.1111/ecno.12225
Abstract
This study examines the relationship between various financial inclusion measures and banks' performance across multiple countries with varying institutional, regulatory, and income levels. To construct an aggregate bank performance index, we employ principal component analysis, which utilises a set of critical indicators summarised by the CAMEL rating system, including banks' solvency, asset quality, efficiency, profitability, and liquidity. Our primary findings indicate that different measures of financial inclusion exhibit varying associations with bank performance. Specifically, there is a trade-off between bank performance and credit deepening, especially in high income nations. Conversely, in low income nations, higher financial inclusion, measured by deposits to GDP, number of deposits, and number of borrowers, does not affect bank performance adversely. Banks in low income nations could achieve significant gains by improving financial access and enhancing regulatory environments.
Item Type: | Article |
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Uncontrolled Keywords: | Financial Inclusion; Bank Performance; CAMEL Ratios; Cross-Country Analysis; High and Low Income Countries |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Essex Business School |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 09 Aug 2023 13:47 |
Last Modified: | 03 Nov 2023 16:26 |
URI: | http://repository.essex.ac.uk/id/eprint/36142 |
Available files
Filename: On the Relationship between Financial Inclusion and Bank Performance - Accepted.pdf
Embargo Date: 9 August 2025