Tec professors analyze how financial inclusion influences economic growth and poverty reduction in ten countries on the continent.
Luz del Carmen Díaz Peña, National Director of the Bachelor of Finance Program, is leading a research project on how financial inclusion relates to economic growth and poverty reduction in the Americas, along with Dr. Georgina Maldonado and Dr. Ignacio Ibarra, professors at the Tec’s Puebla campus.
Financial inclusion is about providing people with formal access to services such as bank accounts, credit, savings instruments, and digital payments.
The study analyzes information from the ten countries with the highest Gross Domestic Product (GDP) on the continent, including Mexico, Brazil, the United States, and Canada, using data obtained from international organizations and specialized financial platforms.
The research aims to answer two key questions. “We’re studying whether financial inclusion has a greater impact on poverty reduction or economic growth, and whether that impact varies between developed countries and emerging economies,” said Díaz Peña.
The team has applied statistical models that allow the effect of different economic variables, banking performance, and the financial infrastructure available in each country to be compared over several years.
According to preliminary results, “financial inclusion has a greater impact on poverty reduction than on economic growth,” said the researcher, a finding they consider particularly relevant for emerging economies.
The elements that explain inclusion
This research defines financial inclusion as formal access to services such as bank accounts, credit, savings instruments, and digital payments. These elements allow us to compare how each country provides these services to its population.
Their model was based on three dimensions: economic variables such as investment and public spending, a banking performance index, and financial infrastructure factors such as ATMs, branches, and cooperatives.
“The variables with the highest correlation were the number of branches and ATMs, which had a strong impact on poverty reduction. The greater the access to this infrastructure, the greater the financial inclusion and the better the results in all the countries analyzed,” said the researcher.
This analysis was conducted using data generated between 1997 and 2023, collected from sources such as the World Bank, IMF, OECD, and financial platforms used in academic laboratories.
Using this structure allowed the study to observe long-term changes in access to financial services and their impact on each country’s economy.
“We’re studying whether financial inclusion has a greater impact on poverty reduction or economic growth, and whether that impact differs between developed countries and emerging economies".
What the countries in the study revealed
The analysis compared ten economies on the continent classified by the IMF as advanced (United Statesand Canada) and emerging (Brazil, Mexico, Argentina, Colombia, Chile, Peru, Ecuador, and Panama).
According to Díaz Peña, in developed countries, “financial inclusion does have a positive impact on economic growth,” especially when banking infrastructure is stable and the use of formal services is greater.
In emerging economies, the team revealed that financial inclusion has a greater impact on poverty reduction than on GDP growth, driven by access to ATMs, branches, and basic services.
“Financial inclusion is a more powerful driver of poverty reduction than of economic growth,” said the researcher when describing the differences between the two groups.
According to the authors, the study also showed that the banking performance index has a negative relationship with growth, reflecting profits that may not remain in the country’s economy.
The challenges of financial inclusion
One of the main challenges the research identified was information availability. In several countries, data on financial inclusion is not recorded continuously, which limits long-term comparison and analysis.
“The financial inclusion survey is only conducted every three years, which reduces the accuracy of the study in countries such as Mexico,” said Díaz Peña, pointing to the need for more consistent data collection.
She also emphasized that in some emerging economies, banking infrastructure fails to keep pace withrising demand, making it harder for people to access formal financial services.
The study reveals that financial education is a key element in improving access. “It’s important for people to know why they should use formal tools and avoid informal channels that could put their money at risk,”she said.
The researcher explains that technology offers a significant opportunity as digital services and mobile payments make financial products more accessible without relying on physical infrastructure, thereby expanding reach in areas with limited access to banking services.
What’s next for the research?
Dr. Luz del Carmen Díaz Peña explained that the study was developed in collaboration with Dr. Georgina Maldonado and Professor Ignacio Ibarra, who participated in the literature review, statistical modeling, and analysis of results.
“Dr. Ibarra helped us run the economic models, while Georgina and I searched for previous studies and interpreted the findings,” said Díaz Peña, describing their joint effort.
The team plans to scale the research nationwide to examine the variations in financial inclusion acrossmunicipalities and identify the key factors behind regional disparities.
Díaz Peña also expressed her interest in studying the wage gap, due to its relationship with inclusion and financial equity. “It’s an important issue, especially in Latin American countries, where wage disparities remain stark,” she said.
The researcher concluded by highlighting the importance of using reliable sources and promoting the use of formal financial services to improve resource management and support the economic development of communities.
“It’s important for people to know why they should use formal tools and avoid informal channels that could put their money at risk".
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