Financial Inclusion and Bank Efficiency

Muhamad Faeqi Hadi Saputra, Mariani Abdul-Majid

2018

Abstract

This paper uses stochastic frontier analysis to examine whether the impact of financial inclusion on bank efficiency. Using an international sample of 2,207 banks in 70 countries over period 2008-2016. We found that increasing financial inclusion using technology more effective in terms of cost for banks comparable to conventional methods. More specifically, we find that financial inclusion on access dimension proxied by ATM per 1,000 km2 have a negative relationship with cost inefficiency, while branch per 100,000 adults has a positive relationship with cost inefficiency. Moreover, we find evidence that financial inlusion on used dimension proxied by deposit accounts per 1,000 adults show that positive effect on cost efficiency. These findings show that financial products and services are innovation based on technology must be improved. Technological innovation is key implication for policy makers, bank regulators, and industry players to create more financial inclusiveness for people.

Paper Citation

in Harvard Style

Saputra M. and Abdul-Majid M. (2018). Financial Inclusion and Bank Efficiency.In Proceedings of the 1st Unimed International Conference on Economics Education and Social Science - Volume 1: UNICEES, ISBN 978-989-758-432-9, pages 1294-1300. DOI: 10.5220/0009510712941300

in Bibtex Style

@conference{unicees18,
author={Muhamad Faeqi Hadi Saputra and Mariani Abdul-Majid},
title={Financial Inclusion and Bank Efficiency},
booktitle={Proceedings of the 1st Unimed International Conference on Economics Education and Social Science - Volume 1: UNICEES,},
year={2018},
pages={1294-1300},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0009510712941300},
isbn={978-989-758-432-9},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 1st Unimed International Conference on Economics Education and Social Science - Volume 1: UNICEES,
TI - Financial Inclusion and Bank Efficiency
SN - 978-989-758-432-9
AU - Saputra M.
AU - Abdul-Majid M.
PY - 2018
SP - 1294
EP - 1300
DO - 10.5220/0009510712941300