| Abstract [eng] |
Relevance of the Topic. Financial inclusion is an important factor in modern economies and social cohesion, enabling people to access basic financial services. Its development contributes to economic stability, reduces social exclusion and increases opportunities for vulnerable groups. While digital technologies have contributed significantly to accelerating this process, the growing gap between different population groups, between urban and rural areas, older and younger people, poses a threat to equitable access to these services. In addition, the decline in traditional financial infrastructure (bank branches, ATMs), combined with a lack of digital literacy, means that the growth in financial inclusion does not always have the desired social impact. To provide informed solutions for policymaking, it is important to identify how financial inclusion affects poverty and income inequality rates in the EU countries. Object, Aim, and Objectives of the Project. The object of the final project – income inequality and poverty in the European Union in the context of financial inclusion. The aim of the project – to assess the impact of financial inclusion on the risk of poverty and income inequality in the European Union. To achieve this aim, the following objectives have been set: to analyse the problem of the impact of financial inclusion on income inequality and poverty; to present theoretical solutions regarding the impact of financial inclusion on income inequality and poverty; to describe the research methodology; to empirically examine the impact of financial inclusion on poverty and income inequality in the European Union. Research Methods. To achieve the aim of the project, the following research methods were used: statistical data systematization, graphical analysis, comparative analysis and synthesis of scientific literature, correlation – regression analysis, causality assessment, and the development of an econometric correction (ECM) model. Main Research Results. An analysis of the literature shows that financial inclusion affects poverty and income inequality through different mechanisms, such as access to credit, insurance, access to savings and use of digital financial services. The literature also identifies two main groups of indicators for measuring financial inclusion, namely usage and access indicators. The graphical analysis shows that financial inclusion rates in the EU have increased significantly between 2004 and 2023, but the poverty risk rate and the Gini coefficient have remained stable. It can be assumed that increasing access to financial services does not in itself guarantee a reduction in social exclusion, as this requires that services are accessible to all groups of the population. The results of the econometric estimation showed that only the total number of card payments had a statistically significant non-linear relationship with the level of risk of poverty, while the number of bank branches showed both a short-run and a long-run relationship with income inequality. A non-linear quadratic relationship was found between the level of poverty risk and the total number of card payments. Initially, an increase in the number of card payments may be associated with an increase in the level of poverty risk, but once a certain point is reached, this effect weakens and becomes negative. This means that at first only a fraction of the population uses modern instruments, but later, as they become more widely available, they contribute to improving the quality of life for all. In the short term, a one-unit increase in the number of bank branches (per 100 000 inhabitants) reduces the Gini coefficient by an average of 0.0341 per cent, holding other factors constant. In the long run, an increase in the number of bank branches by one unit (per 100 000 inhabitants) leads to an average decrease in the Gini coefficient of 0.0485%. The results suggest that certain indicators of financial inclusion, particularly those related to traditional financial infrastructure, still have a significant impact on social change. Meanwhile, other financial inclusion indicators, as well as macroeconomic control factors such as real GDP per capita and unemployment rates, did not show a significant impact. The results suggest that the impact of financial inclusion on social well-being depends not only on technological progress, but also on the availability of services, the effectiveness of social policies and the capacity to include the most vulnerable groups. |
