Financial Inclusion and Bank Stability in Selected SADC Countries
Financial inclusion is very critical in every country and has recently become a policy agenda for economic stability. A number of studies have suggested both positive and negative ways in which financial inclusion could affect financial stability, but very few empirical studies have been made of...
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EconJournals
2024-12-01
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| Series: | International Journal of Economics and Financial Issues |
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| Online Access: | https://www.econjournals.com/index.php/ijefi/article/view/17294 |
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| author | Leward Jeke |
| author_facet | Leward Jeke |
| author_sort | Leward Jeke |
| collection | DOAJ |
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Financial inclusion is very critical in every country and has recently become a policy agenda for economic stability. A number of studies have suggested both positive and negative ways in which financial inclusion could affect financial stability, but very few empirical studies have been made of their relationship. However, there seems to be a lack of consensus across the literature on the effect of financial inclusion on bank stability especially in developing countries. Given the different empirical views, the aim of this study is to examine the effect of financial inclusion on bank stability in selected SADC countries. The study findings reveal that financial inclusion has a significant positive relationship with bank stability (z-score). The study also found a significant negative effect of bank efficiency on bank stability. Policymakers should ensure financial literacy for all to reduce bank fragility. They should also find ways of enhancing bank competition which reduces non-performing loans and bank insolvency. On practical implications, the study calls for the complementation of financial inclusion with financial literacy to enhance bank stability.
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| format | Article |
| id | doaj-art-e4627231cd8b4a8e841cdfbddd2bbcf9 |
| institution | Kabale University |
| issn | 2146-4138 |
| language | English |
| publishDate | 2024-12-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj-art-e4627231cd8b4a8e841cdfbddd2bbcf92024-12-15T01:03:53ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382024-12-0115110.32479/ijefi.17294Financial Inclusion and Bank Stability in Selected SADC CountriesLeward Jeke0Department of Economics, Nelson Mandela University, Gqeberha, South Africa Financial inclusion is very critical in every country and has recently become a policy agenda for economic stability. A number of studies have suggested both positive and negative ways in which financial inclusion could affect financial stability, but very few empirical studies have been made of their relationship. However, there seems to be a lack of consensus across the literature on the effect of financial inclusion on bank stability especially in developing countries. Given the different empirical views, the aim of this study is to examine the effect of financial inclusion on bank stability in selected SADC countries. The study findings reveal that financial inclusion has a significant positive relationship with bank stability (z-score). The study also found a significant negative effect of bank efficiency on bank stability. Policymakers should ensure financial literacy for all to reduce bank fragility. They should also find ways of enhancing bank competition which reduces non-performing loans and bank insolvency. On practical implications, the study calls for the complementation of financial inclusion with financial literacy to enhance bank stability. https://www.econjournals.com/index.php/ijefi/article/view/17294Financial Inclusion, Bank Stability, SADC Countries |
| spellingShingle | Leward Jeke Financial Inclusion and Bank Stability in Selected SADC Countries International Journal of Economics and Financial Issues Financial Inclusion, Bank Stability, SADC Countries |
| title | Financial Inclusion and Bank Stability in Selected SADC Countries |
| title_full | Financial Inclusion and Bank Stability in Selected SADC Countries |
| title_fullStr | Financial Inclusion and Bank Stability in Selected SADC Countries |
| title_full_unstemmed | Financial Inclusion and Bank Stability in Selected SADC Countries |
| title_short | Financial Inclusion and Bank Stability in Selected SADC Countries |
| title_sort | financial inclusion and bank stability in selected sadc countries |
| topic | Financial Inclusion, Bank Stability, SADC Countries |
| url | https://www.econjournals.com/index.php/ijefi/article/view/17294 |
| work_keys_str_mv | AT lewardjeke financialinclusionandbankstabilityinselectedsadccountries |