The Impact of Financial Inclusion on Poverty in Jordan

Tamara Firas Al Maaytah; Talib Mohammad Awad

doi:doi:10.11648/j.ijber.20200905.14

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The Impact of Financial Inclusion on Poverty in Jordan

Tamara Firas Al Maaytah, Talib Mohammad Awad

Published in International Journal of Business and Economics Research (Volume 9, Issue 5)

Received: 3 August 2020 Accepted: 17 August 2020 Published: 27 August 2020

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Abstract

This study aimed to estimate the long-run impact of financial inclusion along with a set of control variables on the poverty in Jordan during the period spans from 1980 through 2018. The per capita income growth rate was used as an indicator of poverty due to the lack of annual data on poverty indices. The study used the Autoregressive Distributed Lag (ARDL) Model to test for cointegration. Also, both Fully Modified OLS (FMOLS) and Dynamic OLS (DOLS) are used to estimate the long-run model parameters. The ADF (Augmented Dickey-Fuller) results indicate that the variables integrated of order one I(1) or integrated of order zero I(0) but none is I(2). The diagnostic statistical tests necessary to ensure the model’s adequacy and validity indicate that the model is free from statistical problems, and the estimation results are reliable. The bounds test to cointegration provide evidence on the existence of long-run equilibrium relationship among variables, and hence, the variables are cointegrated. The empirical results revealed a positive effect of loans and demand deposits on per capita income, which reflects a reduction in poverty. While the number of bank branches has a negative impact on the per capita income, and hence, increasing poverty. Accordingly, the study recommended improving financial and banking systems to facilitate obtaining loans, increase the number of branches to improve individuals' access to financial services, and raising the interest rate on deposits to encourage investors and capital owners and companies to save in banks.

Published in	International Journal of Business and Economics Research (Volume 9, Issue 5)
DOI	10.11648/j.ijber.20200905.14
Page(s)	316-323
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Jordan, Poverty, Financial Inclusion, ARDL, Per Capita Income

References

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[20]	Okoye, L. U., Erin, O., & Modebe, N. J. (2017). Financial Inclusion as a Strategy for Enhanced Economic Growth and Development. The Journal of Internet Banking and Commerce, 1-14.
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APA Style

Tamara Firas Al Maaytah, Talib Mohammad Awad. (2020). The Impact of Financial Inclusion on Poverty in Jordan. International Journal of Business and Economics Research, 9(5), 316-323. https://doi.org/10.11648/j.ijber.20200905.14

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ACS Style

Tamara Firas Al Maaytah; Talib Mohammad Awad. The Impact of Financial Inclusion on Poverty in Jordan. Int. J. Bus. Econ. Res. 2020, 9(5), 316-323. doi: 10.11648/j.ijber.20200905.14

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Tamara Firas Al Maaytah, Talib Mohammad Awad. The Impact of Financial Inclusion on Poverty in Jordan. Int J Bus Econ Res. 2020;9(5):316-323. doi: 10.11648/j.ijber.20200905.14

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@article{10.11648/j.ijber.20200905.14,
  author = {Tamara Firas Al Maaytah and Talib Mohammad Awad},
  title = {The Impact of Financial Inclusion on Poverty in Jordan},
  journal = {International Journal of Business and Economics Research},
  volume = {9},
  number = {5},
  pages = {316-323},
  doi = {10.11648/j.ijber.20200905.14},
  url = {https://doi.org/10.11648/j.ijber.20200905.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20200905.14},
  abstract = {This study aimed to estimate the long-run impact of financial inclusion along with a set of control variables on the poverty in Jordan during the period spans from 1980 through 2018. The per capita income growth rate was used as an indicator of poverty due to the lack of annual data on poverty indices. The study used the Autoregressive Distributed Lag (ARDL) Model to test for cointegration. Also, both Fully Modified OLS (FMOLS) and Dynamic OLS (DOLS) are used to estimate the long-run model parameters. The ADF (Augmented Dickey-Fuller) results indicate that the variables integrated of order one I(1) or integrated of order zero I(0) but none is I(2). The diagnostic statistical tests necessary to ensure the model’s adequacy and validity indicate that the model is free from statistical problems, and the estimation results are reliable. The bounds test to cointegration provide evidence on the existence of long-run equilibrium relationship among variables, and hence, the variables are cointegrated. The empirical results revealed a positive effect of loans and demand deposits on per capita income, which reflects a reduction in poverty. While the number of bank branches has a negative impact on the per capita income, and hence, increasing poverty. Accordingly, the study recommended improving financial and banking systems to facilitate obtaining loans, increase the number of branches to improve individuals' access to financial services, and raising the interest rate on deposits to encourage investors and capital owners and companies to save in banks.},
 year = {2020}
}

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TY  - JOUR
T1  - The Impact of Financial Inclusion on Poverty in Jordan
AU  - Tamara Firas Al Maaytah
AU  - Talib Mohammad Awad
Y1  - 2020/08/27
PY  - 2020
N1  - https://doi.org/10.11648/j.ijber.20200905.14
DO  - 10.11648/j.ijber.20200905.14
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 316
EP  - 323
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20200905.14
AB  - This study aimed to estimate the long-run impact of financial inclusion along with a set of control variables on the poverty in Jordan during the period spans from 1980 through 2018. The per capita income growth rate was used as an indicator of poverty due to the lack of annual data on poverty indices. The study used the Autoregressive Distributed Lag (ARDL) Model to test for cointegration. Also, both Fully Modified OLS (FMOLS) and Dynamic OLS (DOLS) are used to estimate the long-run model parameters. The ADF (Augmented Dickey-Fuller) results indicate that the variables integrated of order one I(1) or integrated of order zero I(0) but none is I(2). The diagnostic statistical tests necessary to ensure the model’s adequacy and validity indicate that the model is free from statistical problems, and the estimation results are reliable. The bounds test to cointegration provide evidence on the existence of long-run equilibrium relationship among variables, and hence, the variables are cointegrated. The empirical results revealed a positive effect of loans and demand deposits on per capita income, which reflects a reduction in poverty. While the number of bank branches has a negative impact on the per capita income, and hence, increasing poverty. Accordingly, the study recommended improving financial and banking systems to facilitate obtaining loans, increase the number of branches to improve individuals' access to financial services, and raising the interest rate on deposits to encourage investors and capital owners and companies to save in banks.
VL  - 9
IS  - 5
ER  -

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Author Information

Tamara Firas Al Maaytah

Department of Business Economics, School of Graduate Studies, University of Jordan, Amman, Jordan
Talib Mohammad Awad

Department of Business Economics, School of Business, University of Jordan, Amman, Jordan

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APA Style

Tamara Firas Al Maaytah, Talib Mohammad Awad. (2020). The Impact of Financial Inclusion on Poverty in Jordan. International Journal of Business and Economics Research, 9(5), 316-323. https://doi.org/10.11648/j.ijber.20200905.14

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ACS Style

Tamara Firas Al Maaytah; Talib Mohammad Awad. The Impact of Financial Inclusion on Poverty in Jordan. Int. J. Bus. Econ. Res. 2020, 9(5), 316-323. doi: 10.11648/j.ijber.20200905.14

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AMA Style

Tamara Firas Al Maaytah, Talib Mohammad Awad. The Impact of Financial Inclusion on Poverty in Jordan. Int J Bus Econ Res. 2020;9(5):316-323. doi: 10.11648/j.ijber.20200905.14

Copy | Download

@article{10.11648/j.ijber.20200905.14,
  author = {Tamara Firas Al Maaytah and Talib Mohammad Awad},
  title = {The Impact of Financial Inclusion on Poverty in Jordan},
  journal = {International Journal of Business and Economics Research},
  volume = {9},
  number = {5},
  pages = {316-323},
  doi = {10.11648/j.ijber.20200905.14},
  url = {https://doi.org/10.11648/j.ijber.20200905.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20200905.14},
  abstract = {This study aimed to estimate the long-run impact of financial inclusion along with a set of control variables on the poverty in Jordan during the period spans from 1980 through 2018. The per capita income growth rate was used as an indicator of poverty due to the lack of annual data on poverty indices. The study used the Autoregressive Distributed Lag (ARDL) Model to test for cointegration. Also, both Fully Modified OLS (FMOLS) and Dynamic OLS (DOLS) are used to estimate the long-run model parameters. The ADF (Augmented Dickey-Fuller) results indicate that the variables integrated of order one I(1) or integrated of order zero I(0) but none is I(2). The diagnostic statistical tests necessary to ensure the model’s adequacy and validity indicate that the model is free from statistical problems, and the estimation results are reliable. The bounds test to cointegration provide evidence on the existence of long-run equilibrium relationship among variables, and hence, the variables are cointegrated. The empirical results revealed a positive effect of loans and demand deposits on per capita income, which reflects a reduction in poverty. While the number of bank branches has a negative impact on the per capita income, and hence, increasing poverty. Accordingly, the study recommended improving financial and banking systems to facilitate obtaining loans, increase the number of branches to improve individuals' access to financial services, and raising the interest rate on deposits to encourage investors and capital owners and companies to save in banks.},
 year = {2020}
}

Copy | Download

TY  - JOUR
T1  - The Impact of Financial Inclusion on Poverty in Jordan
AU  - Tamara Firas Al Maaytah
AU  - Talib Mohammad Awad
Y1  - 2020/08/27
PY  - 2020
N1  - https://doi.org/10.11648/j.ijber.20200905.14
DO  - 10.11648/j.ijber.20200905.14
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 316
EP  - 323
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20200905.14
AB  - This study aimed to estimate the long-run impact of financial inclusion along with a set of control variables on the poverty in Jordan during the period spans from 1980 through 2018. The per capita income growth rate was used as an indicator of poverty due to the lack of annual data on poverty indices. The study used the Autoregressive Distributed Lag (ARDL) Model to test for cointegration. Also, both Fully Modified OLS (FMOLS) and Dynamic OLS (DOLS) are used to estimate the long-run model parameters. The ADF (Augmented Dickey-Fuller) results indicate that the variables integrated of order one I(1) or integrated of order zero I(0) but none is I(2). The diagnostic statistical tests necessary to ensure the model’s adequacy and validity indicate that the model is free from statistical problems, and the estimation results are reliable. The bounds test to cointegration provide evidence on the existence of long-run equilibrium relationship among variables, and hence, the variables are cointegrated. The empirical results revealed a positive effect of loans and demand deposits on per capita income, which reflects a reduction in poverty. While the number of bank branches has a negative impact on the per capita income, and hence, increasing poverty. Accordingly, the study recommended improving financial and banking systems to facilitate obtaining loans, increase the number of branches to improve individuals' access to financial services, and raising the interest rate on deposits to encourage investors and capital owners and companies to save in banks.
VL  - 9
IS  - 5
ER  -

Copy | Download