Abstract
Financial inclusion (FI, hence forth) which is provision of
affordable and reasonable formal financial servicesto people,is
believed as a source of financial sector development of an
economywhich in turn leads to economic growth.The most of
population does not have access to formal financial services in
developing economies which is considered as one of the obstacles
in economic growth of these economies. Pakistan is amongst the
countries where FI is low. This study attempts to investigates the
impact of FI on growth of economy in Pakistanby employing
Autoregressive Distribution Lag (ARDL) and the Error Correction
Model (ECM) for the period of 1985-2017. Financial liberalization
is measured by using the principal component analysis (PCA). It is
found that economic growth and FI are cointegrated andFI
positively impacts economic growthin the short-run with one-year
lag suggesting that Pakistan may stimulate its economic growth by
emphasizing on improvement of financial system through increased
FI.
Keywords: Financial inclusion, Economic growth, Principal
Component Analysis, Autoregressive Distribution Lag, Error
Correction Model
nasir ali, kaniz fatima, jameel ahmed. (2019) Impact Of Financial Inclusion On Economic Growth In Pakistan , Journal of Managerial Sciences, Volume 13, Issue 3.
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