The Role of Financial Inclusion on Poverty Reduction in Egypt During the Period (2005-2022)

Document Type : Original Article

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Professor of Economics Higher Institute of Computers and New Technology Management - Tanta- Arab Republic of Egypt

Abstract

The study aims to measure the impact of financial inclusion on poverty reduction in Egypt, in addition to a set of other independent variables, namely : the GDP growth rate, the inflation rate, and the broad money supply growth rate .The study uses the Autoregressive Distributed Lag (ARDL) model and a time series covering the period from 2005 to 2022.  
The estimation results revealed a long - term relationship between the model’s independent  variables  and the  poverty  rate in society. A negative impact was found for both the number of  borrowers from commercial banks per 1,000 adults and the lagged  broad money supply growth rate on the  poverty rate.On the other hand, a positive impact was found for both the number of ATMs and the inflation rate on the poverty rate.
Several recommendations were proposed to enhance the effectiveness of financial inclusion in alleviating poverty, such as expanding banking services in poor areas, increasing awareness of financial services and how to use them so that individuals with low levels of education can use them easily,which would help reduce income inequality, and facilitating procedures for granting affordable and long-term loans to low-income individuals.

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