||The concept of financial inclusion is that people, especially the poverty group living in the developing countries, can get benefit from financial services, including accounts, credit card, payment system, financial product, and so on. The benefit, for example, is that people can enhance human capital by loan to educate themselves, or, that people can open the new business to get profit by loan.|
This study use cross countries data from financial inclusion dataset of World Bank. There are 144 countries within the data and 3 years, 2011, 2014, 2017, respectively. In order to measure what degree of financial inclusion of countries are, this study utilize principal component analysis to make a financial inclusion index and try to figure out what is financial inclusion’s relation on poverty, distance to frontier, income inequity, female empower and entrepreneurship.
The empirical results show that when the degree of financial inclusion increase, there are no clear effect between income inequity and financial inclusion in the high and middle-high and middle-low and low income countries. As poverty, there are no clear effect in the high and middle-high and middle-low and low income countries. As distance to frontier and entrepreneurship, there are positive significantly in the high and middle-high countries, but there are no clear effect in the middle-low and low income countries. As female empower, there are positive significantly in the high and middle-high and middle-low and low income countries.
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