{
  "title": "Financial Inclusion: Can it Meet Multiple Macroeconomic Goals?",
  "publication": "Staff Discussion Notes, September 15, 2015",
  "sourceUrl": "https://www.imf.org/en/publications/staff-discussion-notes/issues/2016/12/31/financial-inclusion-can-it-meet-multiple-macroeconomic-goals-43163",
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  "summary": "Using several recently available global datasets, this Staff Discussion Note examines macroeconomic effects of financial inclusion. It finds significant benefits to economic growth from financial inclusion, but the benefits diminish as financial inclusion and depth become large.",
  "sections": [
    {
      "heading": "Summary findings",
      "content": "- Using several recently available global datasets, the Staff Discussion Note examines macroeconomic effects of financial inclusion.\n- Significant benefits to economic growth from financial inclusion are identified.\n- The benefits diminish as financial inclusion and depth become large.\n- Broadening access to credit can compromise economic and bank stability in countries with weak bank supervision.\n- Other forms of financial inclusion—such as access to and use of bank accounts, branches, and ATMs—do not hurt stability and can be promoted extensively.\n- Gaps in financial inclusion are associated with economic inequality, but the association appears relatively weak."
    },
    {
      "heading": "Analysis and interpretation",
      "content": "- Financial inclusion contributes positively to economic growth, but marginal gains decline at higher levels of inclusion and financial depth.\n- Credit expansion poses stability risks conditional on the quality of bank supervision; weak supervision increases the probability that broader access to credit will undermine economic and bank stability.\n- Non-credit channels of inclusion (account ownership, branch and ATM access and usage) are shown to be benign with respect to stability and thus represent feasible avenues for large-scale promotion.\n- The relationship between financial inclusion gaps and inequality exists but is relatively weak, suggesting complementary policies may be needed to address inequality directly."
    },
    {
      "heading": "Policy recommendations (implied by findings)",
      "content": "- Promote broad access to and use of bank accounts, branches, and ATMs as scalable forms of financial inclusion that do not compromise stability.\n- Exercise caution in policies that rapidly broaden access to credit in environments with weak bank supervision; strengthen supervisory capacity before large-scale credit inclusion initiatives.\n- Recognize that expanding financial inclusion alone may have limited effects on reducing inequality; combine inclusion efforts with targeted distributional or social policies.\n\n---\n\n Content in this bundle\n\n- Financial Inclusion—Can It Meet Multiple Macroeconomic Goals?\n  - Financial Inclusion—Can It Meet Multiple Macroeconomic Goals? (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Financial Inclusion—Can It Meet Multiple Macroeconomic Goals? (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/staff-discussion-notes/issues/2016/12/31/financial-inclusion-can-it-meet-multiple-macroeconomic-goals-43163"
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    "Authors: Ratna Sahay, Martin Cihak, Papa M N'Diaye, Adolfo Barajas, Srobona Mitra, Annette J Kyobe, Reza Yousefi",
    "Published: September 15, 2015",
    "Series: Staff Discussion Notes",
    "DOI: https://doi.org/10.5089/9781513585154.006",
    "Using several recently available global datasets, the Staff Discussion Note examines macroeconomic effects of financial inclusion.",
    "Significant benefits to economic growth from financial inclusion are identified.",
    "The benefits diminish as financial inclusion and depth become large.",
    "Broadening access to credit can compromise economic and bank stability in countries with weak bank supervision.",
    "Other forms of financial inclusion—such as access to and use of bank accounts, branches, and ATMs—do not hurt stability and can be promoted extensively.",
    "Gaps in financial inclusion are associated with economic inequality, but the association appears relatively weak.",
    "Financial inclusion contributes positively to economic growth, but marginal gains decline at higher levels of inclusion and financial depth.",
    "Credit expansion poses stability risks conditional on the quality of bank supervision; weak supervision increases the probability that broader access to credit will undermine economic and bank stability.",
    "Non-credit channels of inclusion (account ownership, branch and ATM access and usage) are shown to be benign with respect to stability and thus represent feasible avenues for large-scale promotion.",
    "The relationship between financial inclusion gaps and inequality exists but is relatively weak, suggesting complementary policies may be needed to address inequality directly.",
    "Promote broad access to and use of bank accounts, branches, and ATMs as scalable forms of financial inclusion that do not compromise stability.",
    "Exercise caution in policies that rapidly broaden access to credit in environments with weak bank supervision; strengthen supervisory capacity before large-scale credit inclusion initiatives.",
    "Recognize that expanding financial inclusion alone may have limited effects on reducing inequality; combine inclusion efforts with targeted distributional or social policies.",
    "**Financial Inclusion—Can It Meet Multiple Macroeconomic Goals?**"
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