Determinants of financial inclusion in Algeria: An ARDL Bounds Test approach

Rahima Benaini1& Samiya Metair2

1 Lecturer, Department of economics, Maghnia University Center, Algeria

2 Ph.D. student, LEPPESE laboratory, Maghnia University Center, Algeria

Article History

Received: 3 June 2022       Revised: 15 November 2022       Accepted: 28 November 2022     Available Online: 5 December 2022

Keywords: financial inclusion index, financial dimensions, determinants, ARDL approach, Algeria

JEL classification: G21; C33

Citation: Benaini, R. & Metair, S. (2022). Determinants of financial inclusion in Algeria: An ARDL Bounds Test Approach, Review of Socio-Economic Perspectives, 7(4), 43-54.

Abstract

Our study aims to afford an empirical insight on the factors that have a great impact on financial inclusion levels in Algeria during the period Q12004-Q42019, using ARDL approach. Using the dataset provided by the World Bank, our empirical results found that the composite index of financial inclusion (FII) based on three dimensions following Sarma (2008) approach is bounded from 0.08 to 0.51, which is proportionally small. Farther, the estimation findings revealed a positive relationship between financial inclusion index and GDP per capita as a proxy of incomes, population, oil rent, interest rate, while, money supply is not significant factor. However, the strong positive relationship is found between FII and corruption, fixed phone subscriptions as a measure of internet access, which means there are the most important determinant of FII in Algeria.

E-mail: benainirahima2021@gmail.com & ORCID: https://orcid.org/0000-0002-8514-4390

E-mail: metair.samiya@cumaghnia.dz  & ORCID: https://orcid.org/0000-0003-4535-9589   

DOI:  https://doi.org/10.19275/RSEP140

Article Type: Original Paper

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