Title: Relationship of financial inclusion and physical quality of life: evidences from SAARC countries
Authors: Arindam Laha; Avisek Sen
Addresses: Department of Commerce, The University of Burdwan, West Bengal, India ' Department of Commerce, Kabi Jagdram Roy Government General Degree College, West Bengal, India
Abstract: In an inclusive development paradigm, it is expected that the process of financial inclusion reinforces an overall improvement in the quality of life of the population in a country. This paper attempts to examine the cross-country variations in the level of financial inclusion and that of quality of life in SAARC region to establish the empirical relationship between them. Empirical results reveal that linkages from quality of life to financial inclusion is quite robust than the other way round. Evidences in South Asia depict significant cross-country variation: Sri Lanka and Maldives excel in terms of financial inclusion and quality of life, while the performance of Pakistan is not satisfactory at all in both the development indicators. Empirical results based on canonical correlation and the casualty test support the relevance of demand following approach of financial inclusion (rather than supply lending approach) in ensuring higher quality of life.
Keywords: financial inclusion; physical quality of life; South Asian Association of Regional Cooperation; SAARC; canonical correlation; panel causality test.
International Journal of Economic Policy in Emerging Economies, 2021 Vol.14 No.3, pp.248 - 268
Received: 06 Nov 2019
Accepted: 31 Mar 2020
Published online: 10 Feb 2021 *