The Impact of Financial Inclusion in Poverty Reduction: Empirical Evidence from Emerging Economies

Solehah Yahaya; Tajul Ariffin Masron; Nik Hadiyan Nik Azman

doi:10.22452/IJIE.vol18no1.5

The Impact of Financial Inclusion in Poverty Reduction: Empirical Evidence from Emerging Economies

Authors

Solehah Yahaya Corresponding author. Islamic Business School, Universiti Utara Malaysia, Sintok, Kedah.
Tajul Ariffin Masron School of Management, Universiti Sains Malaysia, Gelugor, Pulau Pinang.
Nik Hadiyan Nik Azman School of Management, Universiti Sains Malaysia, Gelugor, Pulau Pinang.

DOI:

https://doi.org/10.22452/IJIE.vol18no1.5

Keywords:

Financial inclusion, Poverty, GMM, Developing countries

Abstract

Poverty is a persistent problem that seems improbable for most developing
countries to overcome. This study proposes that financial inclusion has the ability to
progressively decrease poverty. The study analyses the association between financial
inclusion and poverty in 57 developing countries using data from 2011 to 2017. The
analysis employs generalised method of moments (GMM) estimators. The results
demonstrate a strong correlation between financial inclusion and poverty, implying
that increasing financial inclusion has the potential to reduce poverty levels. Enhanced
financial inclusion in developing countries may empower impoverished households
to effectively access and employ the services provided by financial institutions. Thus,
financial inclusion is an effective tool for alleviating poverty among the underprivileged.

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Published

2026-01-01

How to Cite

Solehah Yahaya, Tajul Ariffin Masron, & Nik Hadiyan Nik Azman. (2026). The Impact of Financial Inclusion in Poverty Reduction: Empirical Evidence from Emerging Economies. Institutions and Economies, 18(1), 109–136. https://doi.org/10.22452/IJIE.vol18no1.5

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Issue

Volume 18, No 1 (2026)

Section

Articles

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