FINANCIAL INCLUSION AND ECONOMIC GROWTH IN SAUDI ARABIA: AN EMPIRICAL ANALYSIS

Abstract

 Inclusive development has as of late ended up a curious issue to be considered more profoundly, particularly within the financial sector as outlined within the concept of money related consideration. The role of the financial sector is fundamental as it is thought of as the essential area in improving economic activities. The purpose of this research was to analyze the determinant variables affecting financial inclusion and their

short- term and long-term impact on Saudi Arabia economy using secondary data for the period of 2004 to 2018. ARDL the Auto Regressive Distributed Lag for co-combination strategy and the Pairwise VAR Granger causality Wald tests were utilized to break down the targets of the study. The study reveals that an expansion in the broad money, domestic credit to the private area by banks and loan-to-deposit proportion in commercial banks lead to a huge impact on the monetary development over the long haul. An expansion in GDP per capita, money supply and internet usage lead to significant impact in the financial inclusion the long run. The Pairwise VAR Granger causality Wald tests indicator affirms the significant relationship between the different components of GDP and financial inclusion and show a unidirectional causes and effects between broad money, loan-to-deposit proportion in banks, domestic credit to private area by banks and GDP. Likewise, a unidirectional causality was found between cash flexibility and financial inclusion. Increasing the attention of financial literacy, expanding the access of accessible financial services, advancing the online clients, and increment in the number of adults with bank accounts would improve the financial inclusion in Saudi Arabia.