Financial Inclusion and Human Development: A Comparative Analysis of MENA and BRICS

Financial Inclusion and Human Development: A Comparative Analysis of MENA and BRICS
Author: Mohammad Adnan Eid
Degree: Master of Science in Finance
Date: 2024
Institution: American University in Cairo, Egypt
Supervisor: Prof. Tarek Eldomiaty

This thesis examines the relationship between financial inclusion and human development in BRICS (Brazil, Russia, India, China, South Africa) and MENA (Middle East and North Africa) countries over 2011–2021. Using the Human Development Index (HDI) as the dependent variable, the study investigates how various aspects of financial inclusion affect human development outcomes.

Data sources include the World Bank’s Financial Inclusion Index (Findex) and UNDP’s HDI. The analysis employs a Panel GMM EGLS approach with cross-section weights to account for heterogeneity across countries. Key findings indicate that while the percentage of adults using credit cards negatively impacts HDI, borrowing from formal financial institutions positively affects HDI in both MENA and BRICS regions.

The study highlights country-specific dynamics of financial inclusion, offering insights for policymakers on how targeted financial inclusion initiatives can promote sustainable human development. The results suggest that facilitating access to formal credit and financial services can be a more effective driver of human development than merely increasing access to consumer credit instruments.