2020/06/18 by M. Mostak Ahamed, Ahamed, Mostak, Roxana Gutiérrez‐Romero +1
Economics, Econometrics and Finance · Social Sciences · #COVID-19 Pandemic Impacts #Econometrics (econ.EM) #FOS: Economics and business #Income, Poverty, and Inequality #Microfinance and Financial Inclusion
paper · pdf · doi:10.48550/arxiv.2006.10706
openalex publication_date 2020/06/18 · openalex created_date 2022/07/26 · openalex updated_date 2026/07/28
The ongoing COVID-19 pandemic risks wiping out years of progress made in\nreducing global poverty. In this paper, we explore to what extent financial\ninclusion could help mitigate the increase in poverty using cross-country data\nacross 78 low- and lower-middle-income countries. Unlike other recent\ncross-country studies, we show that financial inclusion is a key driver of\npoverty reduction in these countries. This effect is not direct, but indirect,\nby mitigating the detrimental effect that inequality has on poverty. Our\nfindings are consistent across all the different measures of poverty used. Our\nforecasts suggest that the world's population living on less than 1.90 per day\ncould increase from 8% to 14% by 2021, pushing nearly 400 million people into\npoverty. However, urgent improvements in financial inclusion could\nsubstantially reduce the impact on poverty.\n