Financial Inclusion as a Pathway to Poverty Alleviation and Equality in Latin America: An Empirical Analysis

This study examines the impact of financial inclusion (FI) on reducing poverty and income inequality in Latin America and the Caribbean (LAC), using panel data from 15 countries for the period 2004–2021. System GMM with robust errors was used to address endogeneity issues, and FI was assessed in terms of access to and use of the financial system. The results indicate that increased FI contributes to reducing poverty and income inequality in LAC. While access to financial services plays a crucial role in poverty reduction, the utilization of financial services has a more profound impact on combating income inequality. These results underscore the importance of policies designed to improve financial access and promote the use of financial products and services. It is recommended to expand the banking infrastructure, facilitate the provision of low-cost accounts, and strengthen financial education programs.

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Publication Details

Journal
Journal of risk and financial management
Published
2025-07-16
DOI
https://doi.org/10.3390/jrfm18070392
Citations
4
Primary Topic
Microfinance and Financial Inclusion
Type
article
Field-Weighted Citation Impact
12.52
Controls
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article

Financial Inclusion as a Pathway to Poverty Alleviation and Equality in Latin America: An Empirical Analysis

Jeniffer Rubio, Micaela León
4 citations
Journal of risk and financial management
Microfinance and Financial Inclusion
12.52
article

Financial Inclusion as a Pathway to Poverty Alleviation and Equality in Latin America: An Empirical Analysis

Jeniffer Rubio, Micaela León
article en
4 citations

Abstract

This study examines the impact of financial inclusion (FI) on reducing poverty and income inequality in Latin America and the Caribbean (LAC), using panel data from 15 countries for the period 2004–2021. System GMM with robust errors was used to address endogeneity issues, and FI was assessed in terms of access to and use of the financial system. The results indicate that increased FI contributes to reducing poverty and income inequality in LAC. While access to financial services plays a crucial role in poverty reduction, the utilization of financial services has a more profound impact on combating income inequality. These results underscore the importance of policies designed to improve financial access and promote the use of financial products and services. It is recommended to expand the banking infrastructure, facilitate the provision of low-cost accounts, and strengthen financial education programs.

Journal of risk and financial managementVol. 18(7)
CIUDAD (EC), Universidad de Las Américas (EC)
Openalex Percentile: Top 2%
Microfinance and Financial Inclusion
12.52
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