THE NEXUS BETWEEN FINANCIAL INCLUSION AND ECONOMIC GROWTH- A REVIEW

Abstract

Financial inclusion, defined as the access to and use of formal financial services by individuals and firms, has emerged as a critical driver of economic growth in both developing and developed economies. Though financial inclusion is a term is relatively new in economic discussion, but it has always been a part of the famous theories and policy implications of economic growth and development in different forms like saving, investment, banking, credit etc. This literature review paper synthesizes empirical and theoretical studies to explore the relationship between financial inclusion and economic growth. By examining mechanisms such as savings mobilization, credit access, and financial stability, the review identifies how financial inclusion fosters economic development through enhanced resource allocation, entrepreneurship, and poverty reduction. The paper also highlights gaps in the literature, including regional disparities and the role of digital financial technologies. Drawing on studies from 2000 to 2025, this review provides a comprehensive analysis for researchers and policymakers aiming to understand the nexus between financial inclusion and economic progress.