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What is financial inclusion? A critical review

Author

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  • Thereza Balliester Reis

    (Department of Economics, SOAS University of London)

Abstract
Financial inclusion (FI) has become a key policy for poverty reduction in developing countries. However, there is no consensus on what FI comprises, who should be included and who will deliver this inclusion. The different interpretations of the concept may lead to implementations that do not correspond to the original intent. Moreover, by making certain assumptions implicit, FI may be a policy that merely replicates microfinance initiatives. In order to illustrate the inconsistencies in the existing literature, this article displays a literature review of 67 studies about the definition of FI. Built on the systematic review approach, studies are selected based on inclusion and exclusion criteria, as well as an explicit search strategy, thus providing a reliable and replicable outcome. After identifying the studies, we present a critical discussion about the underlying theoretical and empirical implications of the definitions of FI. This assessment enables a better understanding of FI and its framing. To conclude, a plain definition is suggested to ensure transparency and comparability of FI research.

Suggested Citation

  • Thereza Balliester Reis, 2021. "What is financial inclusion? A critical review," Working Papers 246, Department of Economics, SOAS University of London, UK.
    • Handle: RePEc:soa:wpaper:246
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    File URL: https://www.soas.ac.uk/sites/default/files/2022-10/economics-wp246.pdf
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    References listed on IDEAS

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    Cited by:

    1. Claire Greene & Fumiko Hayashi & Alicia Lloro & Oz Shy & Joanna Stavins & Ying Lei Toh, 2024. "Defining Households That Are Underserved in Digital Payment Services," Working Papers 24-10, Federal Reserve Bank of Boston.
    2. Thereza Balliester Reis & Vincent Mugo Kamau, 2023. "Are low-income workers financially irresponsible? An analysis of financial and accounting practices in Nairobi," Working Papers 260, Department of Economics, SOAS University of London, UK.

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    More about this item

    Keywords

    Financial inclusion; financial development; systematic review; definition;
    All these keywords.

    JEL classification:

    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • G50 - Financial Economics - - Household Finance - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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