Does financial inclusion affect monetary policy in SAARC countries?

By S. K. Lenka, Arun Kumar Bairwa. 2016

116 citations recorded by the source corpus.

Abstract Alike the role of heart for human body, finance is the focal point of an economy, whereas savings and investment are its tubes and vessels. Hence, a solid financial system is a fundamental character of an enduring economy. The frozen financial system endures longer if its foundation is concrete and subsists in the people of grass-root level. They are those, who live in villages and small towns, earn meager income, work in primary sector, spend more on food, and have lesser social securities. In this setting, the process of bringing these people into the main stream of financial activities is called financial inclusion. This study describes the impact of financial inclusion on monetary policy of South Asian Association for Regional Cooperation (SAARC) countries from 2004–2013. The study uses principal component analysis (PCA) to construct a Financial Inclusion Index that serves as a proxy variable for the accessibility of financial inclusion in the SAARC countries. Adding to it, three different models like FEM, REM, and Panel-corrected standard errors are used for the analysis. In this study, an empirical result of generalized least square(GLS) estimation shows that financial inclusion, exchange rate, and interest rate are negatively associated with inflation in SAARC countries.

Subfields: Accounting, Economics and Econometrics, Information Systems

View Paper: https://www.semanticscholar.org/paper/c80d33cd83521fb8ddc86ab7afb3fb332e979401

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In Accounting

1. Shivangi Bhatia
2. Seema Singh
3. T. Nguyen
4. Ruchi Sharma
5. S. K. Lenka

In Economics and Econometrics

1. Shivangi Bhatia
2. Seema Singh
3. T. Nguyen
4. Ruchi Sharma
5. S. K. Lenka

In Information Systems

1. Shivangi Bhatia
2. Seema Singh
3. T. Nguyen
4. Ruchi Sharma
5. S. K. Lenka

Citations in the corpus

• Empowering Women Through Financial Inclusion: A Study of Urban Slum (2019, methodology): “Certain financial inclusion indexes were created using principal component analysis method (Bagil & Dutta, 2012; Lenka & Bairwa, 2016; Lenka & Sharma, 2017).”
• Does Financial Inclusion Spur Economic Growth in India? (2017, background): “Different studies [Arora (2010); Gupte et al (2012); CRISIL (2013); Pradhan et al (2014); Chakravarty and Pal (2013); Sarma (2015); Lenka and Bairwa (2016)] compute a composite financial inclusion index using various financial proxy variables (like number of saving bank account, number of bank…”
• Measuring financial inclusion: a composite FI index for the developing countries (2020, background): “…years, some other studies have built FI index based on PCAmethod to limit the criticism of imposing arbitrary weights proposed by Sarma (e.g. Ahamed andMallick, 2019; Elsherif, 2019; Anarfo et al., 2019; Ismail et al., 2018; Park and Mercado, 2018; Lenka and Bairwa, 2016; Camara and Tuesta, 2014).”