Theories of Financial Inclusion

Abstract

Purpose: This purpose of this chapter is to present several theories of financial inclusion. Financial inclusion is the ease of access to, and the availability of, basic financial services to all members of the population. Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs in a responsible and sustainable way. Financial inclusion practices vary from country to country, and there is need to identify the underlying principles or propositions that can explain the observed variation in financial inclusion practices. These set of principles or propositions are called theories.

Methods: The chapter uses conceptual discussions to formulate alternative theories of financial inclusion.

Findings: The study shows that financial inclusion theories are explanations for observed financial inclusion practices. It also shows that the ideas and perspectives on financial inclusion can be grouped into theories to facilitate meaningful discussions in the literature.

Originality/value: Currently, there are no observed or elaborate theories of financial inclusion in the policy or academic literature. This chapter is the first attempt to develop theories of financial inclusion. The theories are intended to be useful to researchers, academics and practitioners. The resulting contributions to theory development are useful to the problem-solving process in the global financial inclusion agenda.

Citation

Ozili, P.K. (2020), "Theories of Financial Inclusion", Özen, E. and Grima, S. (Ed.) Uncertainty and Challenges in Contemporary Economic Behaviour (Emerald Studies in Finance, Insurance, and Risk Management), Emerald Publishing Limited, Leeds, pp. 89-115. https://doi.org/10.1108/978-1-80043-095-220201008