The influence of financial inclusion on banks’ performance and risk: new evidence from MENAP


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This study seeks to investigate the relationship between financial inclusion factors and banks’ performance and risk among MENAP countries. The sample includes 271 banks located in 24 countries in the region that are interconnected, and micro- and macro-variables that affect the performance and risk levels of these banks. The results indicate that enhancing the level of financial inclusion in the region can increase banks’ performance and decrease their risk. They also point out where these banks could benefit more from financial inclusion in terms of reducing their risks. Future research may include investigating financial inclusion tools to explore the relationship between financial inclusion and banks’ performance and risk in developing countries. More research can be conducted on each MEANP country to analyze their characteristics and the influence of financial inclusion on bank performance and risk. In addition, future research should be conducted to study the relationship between regulations, rules and financial inclusion across countries and economies.

The author is thankful to Prof. Xiuhua Wang, Bo Liu, and Yipeng Wang for their comments and suggestions to improve this paper. The author discloses that funding for the writing of this paper comes from the TAAWON research fund.

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    • Figure 1. Quantile regression results
    • Table 1. Definition of variables
    • Table 2. Descriptive statistics of variables
    • Table 3. The correlation matrix
    • Table 4. OLS estimation results for M1.1 and M2.1
    • Table 5. Quintile estimation results for M1.2
    • Table 6. Quintile estimation results for M2.2
    • Table A1. Countries and the number of banks
    • Table A2. Variance inflation factor – VIF-MENAP
    • Table A3. Heteroskedasticity – MENAP