Financial inclusion and its role in promoting economic development using the financial flexibility approach

An analytical study of the Iraqi banking sector (2010-2020)

A thesis submitted to the Board of the College of Administration and Economics, University of Karbala – which is part of the requirements for obtaining the degree of Doctor of Philosophy in of Financial and Banking Sciences

From 

Ghufran Mohammad Abdul-Hussein Al-Jabri

With supervision by

Assistant Professor Dr.

Kamal Kazem Jawad

The issue of financial inclusion is one of the important topics, which has received great attention from the whole world, and which contributes to the development of the banking sector, as a result of the great development and qualitative boom that occurred in the field of technology, so it is necessary to keep pace with this development, and thus provide the best services to the individual at the level of all his needs And knowing how to invest the role of the development of the system of financial inclusion on the process of economic development and its positive impact in reducing poverty levels, improving the income distribution of individuals, and increasing levels of savings and consumption, as well as its positive impact on labor markets and per capita income levels.

This study sought to shed light on some of the basic cognitive aspects related to the variables of the study, represented by (financial inclusion, economic development, financial flexibility). Financial services, and indicators of the use of financial services) as an independent variable and its role in promoting economic development with its indicators (Gross domestic product, average per capita GDP, literacy rate, spending rate on research and development, unemployment rate) as a dependent variable using the financial flexibility approach With its indicators (the property right multiplier, the debt-to-equity ratio, the cash balance ratio, the legal liquidity ratio, the trading ratio, the employment ratio), the study relied on the practical side on the reports and financial statements published in the annual economic reports issued by the Statistics and Research Department of the Central Bank Iraqi and the Central Statistical Organization in the Ministry of Planning, which were selected depending on the availability of data During the study period for a time series that extended for (11 years) (2010-2020), the study relied on a set of statistical methods using (smart PLS V3) program, as well as (Excel, SPSS) programs to analyze the relationship between the study variables and indicate the direct and indirect impact And the overall effect, and the study also reached a set of conclusions, the most important of which is that the central bank’s reliance on the financial inclusion strategy through the provision of all financial services depending on the official channels contributed to the dissemination of financial culture and banking awareness for the various segments of society, represented by current and savings bank accounts, payment and transfer services, services Insurance, financing and credit services, and the recommendations of this study came to the need to make serious attempts by the Central Bank to advance the banking sector by increasing the number of banks and expanding their spread to remote areas, especially rural ones, in addition to opening many benefit programs such as soft loans and the need to facilitate access to those services provided, As well as facilitating loan procedures and reducing associated costs.

Financial inclusion and its role in promoting economic development using the financial flexibility approach

An analytical study of the Iraqi banking sector (2010-2020)

A thesis submitted to the Board of the College of Administration and Economics, University of Karbala – which is part of the requirements for obtaining the degree of Doctor of Philosophy in of Financial and Banking Sciences

From 

Ghufran Mohammad Abdul-Hussein Al-Jabri

With supervision by

Assistant Professor Dr.

Kamal Kazem Jawad

The issue of financial inclusion is one of the important topics, which has received great attention from the whole world, and which contributes to the development of the banking sector, as a result of the great development and qualitative boom that occurred in the field of technology, so it is necessary to keep pace with this development, and thus provide the best services to the individual at the level of all his needs And knowing how to invest the role of the development of the system of financial inclusion on the process of economic development and its positive impact in reducing poverty levels, improving the income distribution of individuals, and increasing levels of savings and consumption, as well as its positive impact on labor markets and per capita income levels.

This study sought to shed light on some of the basic cognitive aspects related to the variables of the study, represented by (financial inclusion, economic development, financial flexibility). Financial services, and indicators of the use of financial services) as an independent variable and its role in promoting economic development with its indicators (Gross domestic product, average per capita GDP, literacy rate, spending rate on research and development, unemployment rate) as a dependent variable using the financial flexibility approach With its indicators (the property right multiplier, the debt-to-equity ratio, the cash balance ratio, the legal liquidity ratio, the trading ratio, the employment ratio), the study relied on the practical side on the reports and financial statements published in the annual economic reports issued by the Statistics and Research Department of the Central Bank Iraqi and the Central Statistical Organization in the Ministry of Planning, which were selected depending on the availability of data During the study period for a time series that extended for (11 years) (2010-2020), the study relied on a set of statistical methods using (smart PLS V3) program, as well as (Excel, SPSS) programs to analyze the relationship between the study variables and indicate the direct and indirect impact And the overall effect, and the study also reached a set of conclusions, the most important of which is that the central bank’s reliance on the financial inclusion strategy through the provision of all financial services depending on the official channels contributed to the dissemination of financial culture and banking awareness for the various segments of society, represented by current and savings bank accounts, payment and transfer services, services Insurance, financing and credit services, and the recommendations of this study came to the need to make serious attempts by the Central Bank to advance the banking sector by increasing the number of banks and expanding their spread to remote areas, especially rural ones, in addition to opening many benefit programs such as soft loans and the need to facilitate access to those services provided, As well as facilitating loan procedures and reducing associated costs.