Hypothesizing resurgence of financial inclusion to reduce poverty in Afghanistan

Main Article Content

Mohammad Naim Azimi

Abstract

Reducing poverty is a critical topic of policy discussion across the world. Developing countries and post-conflict environments commonly face poverty growth. At present, Afghanistan is experiencing the highest rate of poverty in the world; only one tenth of the Afghan population has access to financial services that are mostly localized within the capital and regional cities. In this paper I hypothesize financial inclusion as a contextualized model that can significantly reduce the rate of poverty. I use a set of timeseries data on financial inclusion determinants excluding insurance as the explanatory variables and linearly regress them on the rate of poverty from 2004 to 2018. The statistical results reveal that ATMs per 100,000 adults in the country significantly reduce poverty by 0.25% by increasing capital mobility and remittances. Credit cards and borrowing facilities to the informal economy have significant coefficients of 0.00635% and 0.0207% respectively on poverty reduction as an emergent strategy. The security variable has a significant coefficient of 41% reduction of poverty. Among all other variables tested, extending mobile money facilities is also significant and reduces poverty by 0.015%.

Article Details

How to Cite
Azimi, M. N. . (2020) “Hypothesizing resurgence of financial inclusion to reduce poverty in Afghanistan”, Journal of Business and Management Revolution. Okinawa, Japan, 1(1), pp. 10-13. doi: 10.37357/1068/jbmr/1.1.02.
Section
Business and Trade

References

Ayub M (2013) “Poverty and Inequality” Global Journal of Emerging Market Economies (vol. 5, no. 3, pp. 329–346) https://doi.org/10.1177/0974910113505796

Chibba M (2009) “Financial inclusion, poverty reduction and the millennium development goals” European Journal of Development Research (vol. 21, no. 2, pp. 213–230) https://doi.org/10.1057/ejdr.2008.17

Kapoor A (2014) “Financial inclusion and the future of the Indian economy” Futures (vol. 56, pp. 35–42) https://doi.org/10.1016/j.futures.2013.10.007

Morgan P, Pontines V (2014) “Financial Stability and Financial Inclusion”

Donovan K (2012) “Mobile Money for Financial Inclusion” Information and Communications for Development, World Bank Group (pp. 61–73) https://doi.org/10.1596/9780821389911_ch04

Finance M of (2018) “National Financial Inclusion Strategy”

Ghosh J (2013) “Microfinance and the challenge of financial inclusion for development” Cambridge Journal of Economics (vol. 37, no. 6, pp. 1203–1219) https://doi.org/10.1093/cje/bet042

Mader P (2018) “Contesting Financial Inclusion” Development and Change (vol. 49, no. 2, pp. 461–483) https://doi.org/10.1111/dech.12368

Zins A, Weill L (2016) “The determinants of financial inclusion in Africa” Review of Development Finance (vol. 6, no. 1, pp. 46–57) https://doi.org/10.1016/j.rdf.2016.05.001

Fungáčová Z, Weill L (2014) “Understanding financial inclusion in China” China Economic Review (vol. 34, pp. 196–206) https://doi.org/10.1016/j.chieco.2014.12.004

Demirguc-kunt, A., and Klapper L (2012) “Measuring financial inclusion. The Global findex database” p. ISBN: 978-0-8213-9509-7

Breusch TS, Pagan AR (1979) “A Simple Test for Heteroscedasticity and Random Coefficient Variation” Econometrica (vol. 47, no. 5, pp. 1287–1294) https://doi.org/10.2307/1911963

Jarque CM, Bera AK (1980) “Efficient tests for normality, homoscedasticity and serial independence of regression residuals” Economics Letters (vol. 6, no. 3, pp. 255–259) https://doi.org/10.1016/0165-1765(80)90024-5

Collier P (2007) “Poverty reduction in Africa” Proceedings of the National Academy of Sciences of the United States of America pp. 16763–16768. https://doi.org/10.1073/pnas.0611702104

Allen F, Carletti E, Cull R, Qian JQJ, Senbet L, et al. (2014) “The African financial development and financial inclusion gaps” Journal of African Economies (vol. 23, no. 5, pp. 614–642) https://doi.org/10.1093/jae/eju015

Soederberg S (2013) “Universalising Financial Inclusion and the Securitisation of Development” Third World Quarterly (vol. 34, no. 4, pp. 593–612) https://doi.org/10.1080/01436597.2013.786285

Beck T, Senbet L, Simbanegavi W (2015) “Financial Inclusion and Innovation in Africa: An Overview” Journal of African Economies (vol. 24, no. 1, pp. i3–i11) https://doi.org/10.1093/jae/eju031