The Relationship Between Financial Inclusion and Real Economic Growth: Examples from Turkey, Developing Countries, Developed Countries, and the World

Kartal Somuncu

doi:10.35408/comuybd.1516794

journal article Jan 25, 2025

The Relationship Between Financial Inclusion and Real Economic Growth: Examples from Turkey, Developing Countries, Developed Countries, and the World

Kartal Somuncu

Yönetim Bilimleri Dergisi Vol. 23 No. 55 pp. 310-335 · Yonetim Bilimleri Dergisi

View at Publisher Save 10.35408/comuybd.1516794

Abstract

Facilitating the integration of individuals and enterprises into the financial system, financial inclusion promotes wider engagement in economic processes and contributes to economic development. Over the past few years, Turkey has made significant strides in enhancing financial inclusion, largely attributed to advancements in digital technologies. Nevertheless, the precise role of these improvements in driving economic growth remains a topic of ongoing discussion.

Key indicators such as bank account ownership, the utilization of mobile payment platforms, and access to credit are commonly used to measure financial inclusion. These indicators influence economic growth through both direct and indirect channels. Increased access to financial services enables businesses to obtain funding more effectively and supports individuals in managing their savings. However, limited financial literacy can act as a barrier, reducing the potential positive effects of financial inclusion on economic growth.

An in-depth analysis of Turkey's financial inclusion indicators, utilizing data from the IMF's International Financial Index spanning 2009 to 2022 and assessed through the ARDL methodology, indicates a modest influence of financial inclusion on economic growth. Several challenges, such as inadequate access to financial services for low-income populations and ongoing regional disparities, have limited the capacity of financial inclusion to significantly propel economic advancement.

While Turkey's financial inclusion indicators still fall short of those seen in developed countries, the increasing uptake of digital financial services highlights opportunities for future progress. Evidence from other nations underscores that higher levels of financial inclusion can play a transformative role in fostering economic growth.

The findings suggest that Turkey has yet to realize the full economic benefits of financial inclusion. Future studies should aim to optimize policies targeting financial inclusion and develop approaches to enhance their effectiveness. Key initiatives may include promoting financial literacy, expanding the reach of digital financial platforms, and addressing regional disparities in access to financial services.

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Details

Published: Jan 25, 2025
Vol/Issue: 23(55)
Pages: 310-335

Authors

K

Kartal Somuncu

AFYON KOCATEPE ÜNİVERSİTESİ

Cite This Article

Kartal Somuncu (2025). The Relationship Between Financial Inclusion and Real Economic Growth: Examples from Turkey, Developing Countries, Developed Countries, and the World. Yönetim Bilimleri Dergisi, 23(55), 310-335. https://doi.org/10.35408/comuybd.1516794

The Relationship Between Financial Inclusion and Real Economic Growth: Examples from Turkey, Developing Countries, Developed Countries, and the World

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