Banking Stability and Financial Inclusion: A Case of Southeast Asian Countries

Abstract

Developing financial inclusion is being considered as one of the crucial strategies to promote finance in particular and economic growth in general. Over the years, many countries, especially developing economies that include Southeast Asia, have developed many policies involving comprehensive financial development strategy to promote the financial system and catch up with the strong globalization trend. The content of this study focuses on assessing the impact of financial inclusion development on financial stability of the banking system in Southeast Asian countries. By using linear regression with panel data, the research results provide useful empirical evidence on the importance of financial inclusion. Thereby, the authors propose policy suggestions to develop financial inclusion for ensuring the stability of the banking system in these countries.