Financial Inclusion in Latin America 2007 - 2015: Evidence using Panel Data Analysis

Abstract

Financial Inclusion plays an important role in terms of economic growth and poverty reduction owing to inequality, therefore, it is a key aspect of public policy in many governments. This study explores those variables that influence financial inclusion in some Latin American countries, through the use of the panel data econometric technique, based on information provided by the World Bank's Global Findex, and the Statistical Yearbook of the World Bank. ECLAC (Economic Commission for Latin America), during the period between 2007 and 2015. The sample includes 7 countries, namely, Argentina, Brazil, Chile, Colombia, Ecuador, Mexico and Peru. The results indicate that financial inclusion has a positive and significant relationship with the value of GDP per capita, such that the greater the income level which families have, the greater will be the participation in the financial system, and consequently, the greater the degree of financial inclusion. On the other hand, the variable public debt, shows that a high level of indebtedness hinders financial inclusion, therefore, its relationship is negative.