Essays on financial inclusion, poverty and inequality

Poverty and inequality are among the most discussed topics in Economics. This thesis aims to investigate the empirical relationship between financial inclusion, poverty and gender inequality. Using unique cross-country panel and survey data sets, three hypotheses are tested: (1) microfinance is an effective tool for poverty reduction; (2) women’s participation in microfinance contributes to improvements in gender equality; and (3) financial inclusion has a positive effect on household income in China. The contributions of this thesis are fourfold. First, it shows that microfinance has a negative effect on poverty at the macroeconomic level. Second, it demonstrates that women’s participation in microfinance is associated with a reduction in gender inequality across countries. However, regional interactions reveal that cultural factors are likely to influence the gender inequality–microfinance nexus. Third, it designs a new multidimensional financial exclusion index using survey-level microeconomic data from China. The index reveals that the gender of the household head is unlikely to play a role in determining access to financial services. However, education, ethnicity and age play significant roles. Fourth, the index is also used to show that financial inclusion has a positive effect on household income and helps to reduce income inequality.