Assessing financial inclusion based on the Human Development Index

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Abstract

Financial inclusion is essential for inclusive growth, yet significant access gaps persist in developing nations. This study examines the macroeconomic factors that influence financial inclusion in 26 developing nations between 2015 and 2021, with a particular emphasis on unemployment, urbanization, and the Human Development Index (HDI). A fixed-effects panel regression model is used to investigate the link between these factors and a composite Index of Financial Inclusion (IFI), drawing on recent empirical frameworks (Ozili, 2024; Sapre, 2025). According to the results, unemployment and urban population are the next most important and statistically significant predictors of financial inclusion, after HDI. These findings highlight how crucial urban financial infrastructure and investments in human capital are to increasing financial access. This study enriches the literature by offering macro-level, cross-country evidence to inform inclusive financial policy. Limitations include the study’s reliance on supply-side data and the exclusion of gender and education-based variables. Future research could expand the framework to encompass demand-side indicators, regional disaggregation, and digital finance dimensions. These results are most relevant to guiding inclusive financial policy in the post-pandemic recovery phase and in support of Sustainable Development Goals (SDGs).

Keywords: Economic Development, Fixed Effects, Panel Data, Unemployment, Urbanization

Authors’ individual contribution: Conceptualization — H.A.B., L.E.A., and H.S.; Methodology — H.S.; Investigation — L.E.A. and H.S.; Resources — L.E.A. and H.S.; Writing — Original Draft — H.A.B., L.E.A., and H.S.; Writing — Review & Editing — H.A.B. and H.S.; Supervision — H.A.B. and H.S.; Funding Acquisition — H.A.B. and L.E.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G21, I38, O16

Received: 24.01.2025
Revised: 23.05.2025; 01.09.2025
Accepted: 16.09.2025
Published online: 19.09.2025

How to cite this paper: Barakat, H. A., El Araby, L., & Saad, H. (2025). Assessing financial inclusion based on the Human Development Index [Special issue]. Risk Governance & Control: Financial Markets & Institutions, 15(3), 250–257. https://doi.org/10.22495/rgcv15i3sip7