Financial Inclusion and Deepening Towards the Economic Growth in Malaysia

This such access, organization and people can diversify their operation in different sectors of the economy thus diversifying economic growth. This can be witnessed in the performance of the Malaysian economy which has been experiencing growth over the years. Longitudinal study methodology has been employed in the research where data of the banking sector over the past year has been observed. The findings were that, with increased financial inclusion and deepening among the people; there is positive economic growth in Malaysia. Hence from this, it can be concluded that financial deepening and inclusion are key factors in pushing economic growth. 2 being recorded in 2017. In the year 2018 the economic growth has spiraled downwards to 5. 9 and therefore it is important to access the effects the banking sectors play in the economic growth of Malaysia.

Several types of research have been down elsewhere to determine the relationship between financial deepening and inclusion and economic growth. These studies have used both developing and developing countries data sets to make their solid conclusions. With financial inclusion, individuals can access credit at a favorable rate and make deposits easily. When individuals get credit, they invest in the economy hence stimulating the economy. With credit, individuals can start small-scale businesses where they can improve their livelihood. This small-scale business which contributes immensely to the economic growth of a country. Also with increased deposits, financial institutions can offer loans to a large number of people and organizations. This has been replicated over the year and it has been attributed to financial reforms and various restructuring among financial entities that have aimed to better the banking sector.

Conceptual Framework Financial inclusion and deepening are the dependent variables in this case where their alterations affect the independent variable, economic growth. Increased financial inclusion and deepening lead to having more access to banking facilities and therefore they can make more deposits and access loan conveniently. The loans can be invested in various sectors of the economy which stimulate economic growth. 0 Research Methodology This study is longitudinal in nature as data has been gathered and observed over a period of time. With access to loan individuals can start up business and in turn, providing financial stability to the individual and reducing poverty levels in the country. Reduced poverty helps in fuelling economic growth because a large chunk of population and access to resources and also the startup businesses contribute to economic growth informally References Foong Joshua “Malaysia Shares Lessons on Achieving High Financial Inclusion for Other Countries,” World Bank, Retrieve on May 11, 2018.