The impact of financial inclusion and other factors on economic growth

Abstract

 Financial inclusion is an important factor contributing to the economic growth and development of each country. Financial inclusion is reflected in many different aspects, so to build financial inclusion index the authors use the Principle Component analysis method (PCA). In this section of the study, the authors use the Principle Component Analysis method (PCA) to construct a financial inclusion index by two dimensions: usage and access. Next, the authors use panel data regression with data sets of 97 countries for the period 2011-2017 to estimate the impact of the financial inclusion index and other factors on economic growth. The results find out the financial inclusion index has a positive effect on economic growth. The research results also show that the rate of employees working, and the business freedom index has a positive impact on economic growth.