Determinants of Financial Inclusion in South Asia: Evidence from the Global Findex 2021

Abstract

This study investigates the determinants of financial inclusion in South Asia using micro-level data from the Global Findex 2021, covering 8,009 individuals across six countries (excluding Bhutan and Maldives). It examines how socioeconomic, demographic, and individual characteristics influence three dimensions of financial inclusion: account ownership, formal savings, and formal borrowing. Logistic regression results show that age, education, and digital access significantly increase the likelihood of owning a bank account and holding formal savings. However, women, non-working individuals, and middle- to upper-income rural residents are less likely to be financially included. While formal savings are positively associated with education, formal borrowing appears more need-driven, showing limited association with education or resilience. Gender disparities persist across all dimensions, with women consistently less likely to engage with formal financial systems. The findings call for targeted financial inclusion strategies that address gender, employment status, and digital access gaps, particularly in rural areas.