Impact of financial inclusion on performance of commercial banks

Abstract

The objective of this research is to examine the impact of financial inclusion on the performance of commercial banks. Statistical programs used are SPSS and E-views. The sample size taken was 15 banks listed in the Egyptian stock exchange during a sample period from 2013 to 2020 to come up with 120 observations. The information are collected from financial statements existed in the bank’s annual reports. Financial inclusion is independent variable which is measured by financial inclusion index. Also, Bank performance is dependent variable that is measured by ROA and ROE. Furthermore, bank size is a control variable that is measured through Natural Log of Total Assets. The results stated that financial inclusion has significant impact on the performance of commercial banks which means that, there is a positive relationship between financial inclusion and ROA, in addition to a positive relation also between financial inclusion and ROE. The limitations faced are concluded in the data availability and small sample period. Also, most of the researches were neglecting the Middle East countries. Furthermore, several roles of financial inclusion were not discussed.