Impact of Financial Inclusion in Low- and Middle-Income Countries: A Systematic Review of Reviews

This systematic review of reviews assesses the evidence on economic, social, behavioral and gender-related outcomes from financial inclusion. It collects and appraises all of the existing meta-studies – that is systematic reviews and meta-analyses – of the impact of financial inclusion. The authors first analyze the strength of the methods used in those meta-studies, then synthesize the findings from those that are of a sufficient quality, and finally, report the implications for policy, programming, practice and further research arising from the evidence. 11 studies are included in the analysis.

The review found that impacts are more likely to be positive than negative, but the effects vary, are often mixed, and appear not to be transformative in scope or scale, as they largely occur in the early stages of the causal chain of effects. Overall, the effects of financial services on core economic poverty indicators such as incomes, assets or spending, and on health status and other social outcomes, are small and inconsistent. Moreover, there is no evidence for meaningful behaviour-change outcomes leading to further positive effects.

The weak effects found warn against unrealistic hype for financial inclusion, as previously happened for microcredit. There are substantial evidence gaps, notably studies of sufficient duration to measure higher-level impacts which take time to materialize, and for specific outcomes such as debt levels or indebtedness patterns and the link to macroeconomic development.