Implications of Financial Inclusion in a Country’s Economic Development: A Study on South Asia (Bangladesh)

Abstract

Financial inclusion is the delivery of basic financial services for example savings, credit, insurance and transfer of funds as well as financial consultancy services at affordable costs to the disadvantaged and low-income segments of society. The prime goal of financial inclusion is to facilitate all to participate in the formal financial system that will help to improve the standard of life of the participants and the society as a whole. From a recent survey it is found that more than half (about 2.5 billion) of the world’s working-age people do not have access to the formal financial services. According to World Bank, around 50 percent of the world’s adult and over 70 percent in developing and underdeveloped economies do not have access to the formal financial institutions. In Bangladesh, less than half of the population has an account with formal financial institution. So, by keeping these big portions of population out of the formal economic channel, no country’s economic development is possible. If those under privileged people can be served under the formal financial system, the movement of idle fund will be increased that will be beneficial to the society and contribute to the economic development of a country.

Keywords: Economic Growth, Economic Development, Financial Inclusion, Financial Stability, Sustainable Development.