The significance of access to formal bank accounts becomes evident as it enables individuals to safely transfer and receive funds, make everyday transactions, and make investments to hedge against financial shocks, among others. The present study aims to investigate the extent to which financial inclusion has been adopted by individuals from poor and non-poor backgrounds and males and females across OIC and non-OIC economies. The outcome of the extent of access to financial accounts and financial services—digital payment, savings, borrowing, and financial well-being in terms of financial resilience and financial worrying—is also conducted among the vulnerable group. The study utilises the global findex database, which consists of data from 128,000 individuals across 123 economies, to provide an empirical description of financial inclusion. The outcome of the examination of the disparity of marginalised groups yields valuable insights into the recognition of associated challenges and opportunities for bridging the existing gap.
Top1. Introduction
Financial inclusion promotes equal access to financial services, seeking to remove obstacles that hinder individuals from engaging in the financial sector. Financial inclusion encompasses various financial products, such as banking services, loans, equity options, and insurance solutions. Measuring financial inclusion involves evaluating three key dimensions: the extent of access, the level of usage, and the overall quality. Access encompasses the accessibility and affordability of financial services, while usage gauges the frequency and variety of these services. Quality refers to financial products and services' suitability, convenience, reliability, and safety. The importance of financial literacy as a crucial aspect cannot be overlooked in the process of financial inclusion, as it is explicitly linked to the diffusion of financial inclusion (Agner & Desello, 2023). Recognising the importance of financial inclusion, it becomes evident that it is vital in attaining various social and economic objectives. These include reducing poverty, promoting income equality, fostering job opportunities, empowering women, and ensuring sustainable development (Park & Mercado, 2021). Numerous countries have implemented national financial inclusion strategies and policies to encourage and oversee financial inclusion within specific circumstances.
The fourth industrial revolution is commonly described as the broad diffusion and adoption of digital technologies. The emergence of digital technologies is potentially revolutionising the financial sector. The continuous digital revolution has significantly increased global account ownership over a decade, from 2011 to 2021. During this period, the percentage of adults with account ownership surged by 50 per cent, increasing from 51 per cent to 76 per cent (Demirgüç-Kunt et al., 2022.). The significance of a formal bank account becomes evident as it enables individuals to safely transfer and receive funds, make everyday transactions, and make investments to hedge against financial shocks, among others. Significant progress has been made in global financial inclusion, particularly in increasing the number of individuals with access to banking services. However, investigating a sustainable aspect of financial inclusion needs to be explored. Specifically, financial inclusion, with a particular focus on its distribution by income groups and gender categories. The present study aims to investigate the extent to which financial inclusion has been adopted by individuals from poor and non-poor backgrounds and males and females across OIC and non-OIC economies.
Account ownership has increased to 75 per cent globally, but there is a noticeable 4 per cent gender gap in account access. Men have a higher ownership rate at 78 per cent, while women have a slightly lower rate at 74 per cent (Demirgüç-Kunt et al., 2022). Similarly, there is an evident 8 per cent disparity in account ownership between the rich and the poor. Religion is a significant factor contributing to the lack of account ownership. Based on a recent Global Findex report, only 10 percent of unbanked adults worldwide view religion as an obstacle (Demirgüç-Kunt et al., 2021). Considering the worldwide account ownership statistics, it is crucial to analyse and compare the account ownership of individuals from both OIC and non-OIC countries, taking into account factors such as gender and income-group category. In addition, it is important to investigate the gap in the extent of financial service utilisation and financial wellbeing among women and individuals in lower income brackets of OIC and non-OIC. The contribution of this study in the existing literature is related to an attempt to figure out the gap in financial account access, financial services utilisation, and financial wellbeing across the gender and different income group in OIC and non-OIC. The existing literature is scant in relation to financial wellbeing as a measure of financial resilience and financial worrying.