The impact of financial inclusion on the efficiency of banking systems: an econometric study using panel models for a sample from the G20 Over the period (2005–2023)

This study aims to analyze the impact of financial inclusion on the efficiency of banking systems in a sample of G20 countries during the period 2005–2023, using panel data models and Eviews 13. The study focused on measuring the effect of the number of automated teller machines (ATM) per 100,000 adults, the number of commercial bank branches per 100,000 adults, outstanding loans from commercial banks as a percentage of gross domestic product (GDP), and outstanding deposits with commercial banks as a percentage of gross domestic product (GDP) on the efficiency of banking systems, represented by the Net Interest Margin (NIM). The results of the random effects model showed that the number of automated teller machines (ATMs) per 100,000 adults has a positive and statistically significant impact on the efficiency of banking systems, reflecting the role of financial technology in improving banking performance and reducing operational costs. In contrast, the number of commercial bank branches per 100,000 adults was found to have a negative and statistically significant impact, indicating that traditional branch expansion may not be effective in enhancing bank efficiency due to high operational costs. The study also revealed that outstanding deposits and loans from commercial banks as a percentage of gross domestic product have a negative impact on bank efficiency, reflecting challenges in liquidity and credit management in some of the G20 countries. These findings highlight the importance of adopting balanced financial policies that focus on the digital transformation of banking services, improving credit risk management, and implementing effective investment strategies for deposits to ensure the enhancement of banking system efficiency in G20 countries.