Financial Inclusion, Credit Booms, and Financial Stability Risk

IMF Working Papers, January 16, 2026

Source details

Canonical URL: Financial Inclusion, Credit Booms, and Financial Stability Risk

Economic benefits of financial inclusion (a broadening access of the population to financial services) have been studied extensively, but less is known about its potential effects on financial stability.
The study explores the complementarity between credit booms and episodes of rapid expansion of the borrower base, or “credit inclusion,” and finds that the confluence of both helps to predict future financial distress.
Rapid credit inclusion on its own does not usually portend future instability, but it is much more likely to do so when combined with a credit boom.
These results can help to enhance the policymaker’s early warning toolbox.

Subject: Credit, Credit booms, Economic growth, Financial inclusion, Financial markets, Financial sector policy and analysis, Financial sector stability, Inclusive growth, Money
Keywords: boom shock, Credit, credit boom, Credit booms, credit inclusion, Early warning indicators, Financial inclusion, Financial sector stability, Financial stability, Global, IMF working papers, Inclusive growth, stability risk

IMF Working Paper: Financial Inclusion, Credit Booms, and Financial Stability Risk (January 16, 2026).