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Financial Stability and Financial Inclusion

dc.contributor.authorPeter J. Morgan
dc.contributor.authorVictor Pontines
dc.date.accessioned2015-01-24T13:12:51Z
dc.date.available2015-01-24T13:12:51Z
dc.date.issued2014-07-07
dc.identifier.urihttp://hdl.handle.net/11540/1250
dc.description.abstractDeveloping economies are seeking to promote financial inclusion, i.e., greater access to financial services for low-income households and firms, as part of their overall strategies for economic and financial development. This raises the question of whether financial stability and financial inclusion are, broadly speaking, substitutes or complements. In other words, does the move toward greater financial inclusion tend to increase or decrease financial 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. This partly reflects the scarcity and relative newness of data on financial inclusion. This study contributes to the literature on this subject by estimating the effects of various measures of financial inclusion (together with some control variables) on some measures of financial stability, including bank non-performing loans and bank Z-scores. We find some evidence that an increased share of lending to small and medium-sized enterprises (SMEs) aids financial stability, mainly by reducing non-performing loans (NPLs) and the probability of default by financial institutions. This suggests that policy measures to increase financial inclusion, at least by SMEs, would have the side-benefit of contributing to financial stability as well.
dc.languageEnglish
dc.publisherAsian Development Bank Institute
dc.rightsCC BY-NC-ND 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/igo/
dc.titleFinancial Stability and Financial Inclusion
dc.typeWorking Papers
dc.subject.expertFinancial Stability
dc.subject.expertFinancial Management System
dc.subject.expertFinancial Restructuring
dc.subject.expertCapital Market Development
dc.subject.expertErosion
dc.subject.expertMarket Development
dc.subject.expertEconomics
dc.subject.expertErosion
dc.subject.expertInternational Economics
dc.subject.adbInternational Financial Market
dc.subject.adbMultilateral Financial Institutions
dc.subject.adbEconomic Recession
dc.subject.adbMarket
dc.subject.adbCrisis
dc.subject.naturalBusiness recessions
dc.subject.naturalMultilateral development banks
dc.subject.naturalRegulatory reform
dc.subject.naturalCapital
dc.title.seriesADBI Working Paper Series
dc.title.volumeNo. 488
dc.contributor.imprintAsian Development Bank Institute
oar.themeFinance
oar.themeEconomics
oar.adminregionAsia and the Pacific Region
oar.countryBangladesh
oar.countryBhutan
oar.countryIndia
oar.countryMaldives
oar.countryNepal
oar.countrySri Lanka
oar.countryBrunei Darussalam
oar.countryCambodia
oar.countryIndonesia
oar.countryLao People's Democratic Republic
oar.countryCook Islands
oar.countryFiji
oar.countryKiribati
oar.countryMarshall Islands
oar.countryMicronesia, Federated States of
oar.countryAfghanistan
oar.countryArmenia
oar.countryAzerbaijan
oar.countryGeorgia
oar.countryKazakhstan
oar.countryKyrgyz Republic
oar.countryPakistan
oar.countryTajikistan
oar.countryTurkmenistan
oar.countryUzbekistan
oar.countryChina, People’s Republic of
oar.countryHong Kong, China
oar.countryChina, People’s Republic of
oar.countryRepublic of Korea
oar.countryMongolia
oar.countryTaipei,China
oar.countryNauru
oar.countryPalau
oar.countryPapua New Guinea
oar.countrySamoa
oar.countrySolomon Islands
oar.countryTimor-Leste
oar.countryTonga
oar.countryTuvalu
oar.countryVanuatu Republic
oar.countryMalaysia
oar.countryMyanmar
oar.countryPhilippines
oar.countrySingapore
oar.countryThailand
oar.countryViet Nam
oar.dep.sourceADBI
oar.identifierOAR-002193
oar.authorMorgan, Peter J.
oar.authorPontines, Victor
oar.importtrue
oar.googlescholar.linkpresenttrue


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  • ADBI Working Papers
    The Asian Development Bank Institute (ADBI) Working Paper series is a continuation of the formerly named Discussion Paper series which began in January 2003. The numbering of the papers continued without interruption or change. ADBI was established in 1997 in Tokyo, Japan, to help build capacity, skills, and knowledge related to poverty reduction and other areas that support long-term growth and competitiveness in developing economies in Asia and the Pacific.

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