Cross-country others (2010) found that income inequality decreases, as

Cross-country regressions conducted by Aslan and others (2017)
point out that financial inclusion is associated to income inequality. The
study analyzed the impact of inequality (restricted by gender) in access to
finance on income inequality. The current literature looks at the impact of
financial development on poverty and on reducing inequality. Yet, there are no
cross country analysis which examined financial inclusion and income
inequality. The authors particularly analyzed sub-Saharan Africa, where both
gender and income inequality persist more than other regions. The authors
utilized the Findex database to construct an index of financial inclusion. The
authors concluded that at the country level, unequal financial access is
significantly associated with higher income inequality. The authors used the
2011 data for the empirical analysis given that income inequality data are only
available till 2013 with a lag.  They
constructed indices for both 2011 and 2014.

 

Although the theory points out to a link between
financial access and income inequality, the literature has primarily examined
the relationship between financial depth and income inequality. While the
theory is disconcerted on the course of causality between financial development
and income inequality, empirical studies demonstrate robust impact of financial
development on income inequality.  Beck,
Demirguc Kunt and Levine (2007) concluded that financial development
disproportionately enhances the income of the poor and decreases income
inequality.  According to their findings,
financial reforms which aims at diminishing market frictions can increase
growth without distorting redistributive policies. Covering a panel data
analysis of 22 sub-Saharan African countries for the years from 1999 to 2004, Batuo and others (2010) found
that income inequality decreases, as the countries develop their financial
sector.

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