Female Financial Inclusion:A Global Perspective

In the mid-2000 s,the World Bank and other international institutions endorsed financial inclusion an important development tool for different development outcomes.It is perceived an instrument in achieving several social and economic Sustainable Development Goals(SDGs).Countries are pursuing to enhance financial inclusion to get the potential benefits.However,it is still a long shot for many countries specially developing economies.High financial exclusion is observable in many regions.This exclusion is not evenly spread in demographic groups.Global statistics show that certain demographic groups are facing higher exclusion from financial sector.From gender perspective,female face higher financial exclusion as compared to men.This dissertation aims to make the policymakers realize the importance of enhancing female financial inclusion for the overall development of the society.For this,the dissertation first investigates the perceived impediment in female financial inclusion and later establishes the role it can play in enhancing different development outcomes.The theoretical foundation of this dissertation is based on the following.First,“Induced Financial Literacy Hypothesis”.It provides the framework to understand how remittances induces individuals to opt for the financial services.Remittances familiarizes the individuals with the financial products and services which increases the likelihood to associate with the financial sector.Consequently,financial inclusion increases.Second,“Financial Intermediation Theory” presents the role of financial institutions.The theory suggests that financial institutions work as a financial intermediary in between individuals and the development.The pool of money formed from individuals is used in the development of society.The increase in loanable funds and introduction of new products that matches the need for users is the initiative of financial institutions made possible by financial inclusion.Third,“Sen’s Capability Approach” explains how enhancement in capabilities due to provision of money leads to functioning achievements.For this dissertation,human development and poverty,the two development outcomes are hypothesized to be impacted by increase in financial inclusion of females.The first draft of this dissertation explores the role of remittances in enhancing female financial inclusion.It is suggested that remittances enhance the financial literacy that leads to increase in the likelihood of financial inclusion of females.The investigation is performed by developing three hypotheses from the literature review.The first hypothesis suggests remittances increase female financial inclusion.The results from the analysis suggest that remittance has a positive impact on female financial inclusion.These results are obtained using OLS technique and later on robustness checks have been performed using different techniques and measures.The mechanism analysis of saving borrowing conclude remittance increase saving and borrowing of females from financial institution.Second hypothesis suggest socio-economic heterogeneity effects remittancesfemale financial inclusion relationship.The analysis concluded that this relationship is stronger in cases where education,employment opportunities,and bank penetration is higher.The last hypothesis suggest remittances-female financial inclusion relationship varies with the developing regions.The results confirm the variation and explains different factors such as financial development level can be a contributing factor in this.The second and third draft is about the examination of female financial inclusion and development outcomes.In the second draft,female financial inclusion is concluded to impact human development.For the analysis,different techniques and measures of female financial inclusion has been considered.Human development is measured as HDI.The effects of female financial inclusion on different components of human development is also tested.The results suggest female financial inclusion is found helpful in increasing education,and income but not health.Furthermore,demographic and regional heterogeneity analysis is also carried out.The results of the demographic analysis suggest variation is observable in female financial inclusion-HDI relationship in different levels of demographic factors.This relationship is also observed to be varying in different developing regions of the world.The strongest relationship is observable in South Asian regions whereas the weakest in Sub-Saharan Africa.Third draft of this dissertation is about female financial inclusion and poverty relationship where primary concern is about the impact of female financial inclusion on poverty reduction.For the analysis,poverty is measured using different measures such as headcount ration at $1.90 and $3.10,and poverty gap at$1.90 and $3.10.Robustness check is carried out using Multidimensional poverty headcount ratio(MPM)and different techniques such as IV,REM,and PSM.The impact is also tested on components of MPM.The results suggest female financial inclusion plays role in reducing poverty.The analysis also conclude better institutional quality,higher income,and high Fintech strengthens female financial inclusion-poverty relationship.Furthermore,regional heterogeneity in the relationship is also observed developing countries of different regions.The strongest relationship is observed in Europe and Central Asian region.For Sub Saharan Africa,the relationship is positive which may be due to low institutional quality and stringent conditions.The results from the analysis leads to several policy implications for the policymakers.Several policy implications such as focusing on literacy,employment opportunities,and institutional quality are proposed to reduce the financial exclusion of females.