Determinants of financial inclusion in Afghanistan: a micro-level probit analysis

Purpose The purpose of this study is to analyse the socio-demographic and economic determinants of financial inclusion (FI) in Afghanistan. Design/methodology/approach The study uses the Global Findex data 2021 and probit regression models to analyse determinants of various FI indicators and barriers. Findings The results reveal low levels of formal FI in Afghanistan. Account ownership is limited, and formal saving and borrowing are almost absent. In case of emergency sources of funds, there is a heavy reliance on informal networks. The regression results show that gender, education, income, employment and location are significant determinants of FI in Afghanistan, with variations across account ownership, savings, borrowing, barriers, emergency sources of funds and digital access and usage. Research limitations/implications The analysis could not account for conflict-related factors. Further studies are recommended. Practical implications Targeted interventions for women, mobile banking solutions, formal credit products, financial literacy programs, Islamic financial services and promoting practical use of financial services are recommended. Originality/value This study contributes to the literature by investigating the determinants of FI and barriers in Afghanistan using individual-level data from the 2021 Global Findex database.