The Role of Sustainability and Stability in Enhancing Financial Inclusion: Empirical Evidence from South Asian Banks (2014–2023)

Abstract

The United Nations' 2030 Sustainable Development Goals agenda is acknowledged to be significantly facilitated by financial inclusion (FI). Therefore, FI has significantly improved financial services' affordability and accessibility over the past two decades and has made a substantial contribution to economic growth, but its effects on financial stability cannot be disregarded. In light of this, the study looks into how stability affects FI and also highlights the role of sustainability in FI in the banking sector of South Asia. Data from South Asian banking institutions from 2014 to 2023 is included to accomplish the aim of the study. To analyze the data, the OLS and system generalized moment method (GMM) were used. The study's results show that banks' stability has a positive significant impact on FI. The outcome of this study is beneficial for financial institutions, as they may gain market share, lower operating costs, and higher profits as a result of joining the financial system. Numerous research directions have been proposed in light of the study's findings. This study stands out for giving an analytical analysis of the South Asia region.