The effect of financial inclusion on poverty alleviation and economic growth: a view from an emerging market

This study investigates the impact of financial inclusion (FI) on Egypt's economic growth and poverty reduction. A summary of the extensive FI literature review is conducted, including Egypt's experience. Using 21 years’ worth of data from the WDI database, the relationship between FI, economic growth, and poverty reduction was estimated using the least squares (LS) and autoregressive distributed lag (ARDL) regression models. Our results show that greater FI and government spending growth lead to more economic growth. However, an increase in trade openness reduces the rate of economic growth, indicating that trade openness happens in the direction of consumer imports. Moreover, improving FI leads to a higher poverty rate, and a greater concentration of income reduces the poverty rate.