Resolving the Paradox: How mobile money drives economic growth through financial inclusion

The primary aim of this study is to identify the most relevant financial inclusion variables influencing gross domestic product (GDP) and to choose the optimal multiple linear regression model to quantify their contribution to economic growth. Finance is essential for every economic activity and financial inclusion is closely related to societal empowerment. It is observed in different nations that financial inclusion variables have a valuable impact on economic growth. For this, secondary data were gathered for this study from the IMF (International Monetary Fund) from 2011 to 2020. Graphical presentations were used to visualize the relationship between financial inclusion variables and economic growth. The most eligible variables and the best model among a collection of models based on empirical data were chosen using a stepwise backward elimination technique using multiple linear regression and model selection criteria. From the graph, it is seen that financial inclusion variables are proportionately related to GDP and the results demonstrate that the most eligible variables of financial inclusion that affect GDP are (1) the number of registered mobile money agent outlets, (2) the number of active mobile money accounts, (3) the number of mobile money transactions, and (4) outstanding balances on active mobile money accounts. These variables have a positive impact on economic growth, and the fitted model measures the more significant contribution to economic growth. As a result, it may be summarized that financial enclosure has to be enhanced for the development of rural and border areas of Bangladesh. This study will assist policymakers, development organizations, and scholars and make knowledgeable findings that will guide long-term improvements to minimize the gap between rich and poor, leading to the improvement of the community's wealth and welfare.