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Financial Inclusion and its Effect on Alleviation of Poverty: A Case of Afghanistan

Ms. Sudaba Zahidi, Mr. Waqas Khan

Volume 2 Issue 3 | Sep 2019

DOI: 10.31841/KJEMS.2021.50

Views: 6235

Total Downloads: 16

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Abstract

Financial inclusion is an enabler for many development goals including poverty alleviation, reducing inequality and inclusive growth. In the past two decades, many developing countries have started to put an emphasis on finance as an enabler of development objectives, and financial inclusion as a goal in their development agendas. Yet, financial exclusion remains a big challenge for many countries including Afghanistan. The latest data from Da Afghanistan Bank (2018) shows that 85% of the adult population has no access to financial services, while 54.5% of Afghan population lives below poverty line. In this regards this study is designed to investigate the role of financial inclusion on alleviation of poverty in Afghanistan using questionnaire as a tool to extract data from targeted population. Descriptive statistics is used for data analysis and bar graphs are used as a tool for interpretation of the analysis. Moreover, Linear Regression is used for hypothesis testing and analysis is done through IBM SPSS Statistics. It’s found that access to financial services and quality of financial services has a significant impact on poverty alleviation, while usage of financial services doesn’t have significant impact on poverty reduction. Factors like infrastructure, technology and financial literacy can reduce poverty through financial inclusion. Based on the results we recommend that number of access points should be increased, as well as financial awareness campaigns should be conducted to educate poor and underserved population from benefits of financial services.