Research On The Impact Of Inclusive Finance On The Operating Efficiency Of Commercial Banks

The concept of"financial inclusion"was first summarized by the United Nations in2005,and has become the focus of attention of countries around the world.After the introduction of inclusive finance in China,it has gradually become the focus of financial work.Commercial banks occupy a central position in China’s current financial system and are the main force in the implementation of inclusive finance,but the implementation of inclusive finance will inevitably have an impact on their operational efficiency.On the one hand,the implementation of inclusive finance expands the customer base,which will spread the risk and increase the source of income,and thus can improve their operating efficiency;on the other hand,the customer group of inclusive financial services belongs to low-net-worth customers,which will increase the operating costs of banks and the number of non-performing loans,and thus will reduce their operating efficiency.Therefore,there is an urgent need for further research on how inclusive finance will affect the operating efficiency of commercial banks.Based on this,this paper selects 37 commercial banks in China during the period of2011-2020 to study the impact of inclusive finance on the operational efficiency of commercial banks.Firstly,the literature related to inclusive finance,commercial banks’operational efficiency and the impact of inclusive finance on commercial banks’operational efficiency is sorted out,the concepts and theories related to inclusive finance are explained,the mechanism of the impact of inclusive finance on commercial banks’operational efficiency is discussed and relevant hypotheses are proposed.Second,a two-stage DEA model is used to measure the operational efficiency of the sample banks.Finally,a Tobit model is constructed to study the impact of financial inclusion on the operational efficiency of the sample banks.The results of the efficiency measures show that the efficiency values of the sample banks as a whole and in the fund raising sub-stage are increasing year by year,and the efficiency values in the fund utilization stage are higher than those in the fund raising stage.In terms of slack variables,the sample banks perform well in terms of inputs,and in terms of outputs most of them have the problem of insufficient desired outputs and redundant non-desired outputs.The Malmquist index analysis reveals that the operational efficiency of the sample banks shows an upward trend,and the rise comes from the progress of the sample banks in terms of management and business model,while the slow growth rate is mainly due to the decline of the technological progress change index.Therefore,the sample banks should further optimize the allocation of R&D investment and promote their own technological progress to improve their operational efficiency.The empirical results show that the weighted digital inclusive finance index and the number of employees per100,000 people are significantly and positively related to the efficiency of the sample banks as a whole and at each sub-stage,and the number of institutions per 100 km~2has a significant inhibitory effect on the efficiency of the sample banks whole and at each sub-stage;different dimensions of the digital inclusive finance index have different effects on the efficiency of the sample banks,with the breadth of coverage and depth of use having a significantly contribute to the overall efficiency of the sample banks;breadth of coverage,depth of use and digitalization all have significant positive effects on the efficiency of the fund raising sub-stage,while only depth of use has a significant positive effect on the efficiency of the fund utilization sub-stage;heterogeneity analysis shows that inclusive finance has different effects on the operating efficiency of different types of banks;in addition,the establishment of an inclusive finance business unit is beneficial to commercial banks in improving their operating efficiency.Finally,in order to promote the sustainable development of commercial banks’inclusive finance business and improve their operational efficiency,this paper puts forward relevant policy recommendations in terms of differentiated policies,technological innovation,and control of non-performing loan ratio.