THE ECONOMIC TRANSFORMATION: THE ROLE OF SUSTAINABLE BANKING IN QUALITY GROWTH

This research explore how sustainable banking methods and economic growth are connected by studying the effects of financial inclusion and green bonds on the Human Development Index (HDI). We used a regression model to see how the pro-13 portion of the bank account worldwide and the total value of green bonds influence HDI, which measures both economic and social 14 well-being. Our results show a strong positive link between financial inclusion and HDI. For every unit increase in account ownership, 15 HDI increases up to 0.00158, suggesting that making financial services more accessible can create more economic opportunities and 16 improve well-being. Although the total value of green bonds has a small negative effect on HDI, this effect is statistically significant. 17 For every additional unit of green bonds, HDI dropping by 0.000025. This unexpected result denote that the benefits of green investments 18 takes time to be observed, suggesting that the advantages of investing in green projects might not immediately meet the needs of 19 human development. The study reveal that financial inclusion helps improve human development, but the impact of green bonds 20 needs further research to understand their long-term effects. This article offers applicable insights for the banking domain on both 21 short-term development goals and long-term sustainability. The paper investigates the combined influence of sustainable banking practice and financial inclusion proxied by green bond investments on Human Development Index. Our regression model would explain HDI-focus on global account ownership and the total value of green bonds as a widely used indicator of economic and social welfare. The analysis uses data from the Global Findex database, the Climate Bonds Initiative, and the Human Development Reports for the years 2011 through 2023. Missing data points were estimated using linear interpolation and extrapolation to predict future values. Our results indicate a strong positive relationship between financial inclusion and HDI. This means that for each additional unit of ownership of global accounts, HDI increases by 0.00158, indicating that increased access to financial services develops economic opportunities and advances human well-being. The overall value of green bonds has a negative statistically significant but tiny impact on HDI: a rise in every unit of investment in green bonds decreases HDI by 0.000025. This result indicates that even though green investments are highly crucial for sustainability, their fruition in terms of human development may take some time. The study, therefore, concludes that financial inclusion drives human development, while the long-term effect of green bonds on HDI needs more details. These findings equally provide useful insights into the eyes of policymakers and all stakeholders in the banking sector on how to adopt a balanced approach between short-term development goals and long-term sustainability goals.