Financial Inclusion and Human Development in OIC Member Countries: Evidence from Panel Quantile Regression Method

Document Type : Research Paper


1 Department of Economics, College of Social and Management Science, Al-Qalam University Katsina, Kastina, Nigeria.

2 Faculty of Business and Management, University Sultan Zainal Abidin, Kastina, Malaysia.


The Organization of Islamic Cooperation (OIC) member countries have the lowest human development index (0.63) compared with the world average (0.73) and developing countries average (0.68). However, the level of human development varies among the member countries, with the majority of the members categorized under low and medium levels of human development. To explore more information about the effect of financial inclusion on human development across different levels of human development in OIC countries, this study used panel quantile regression to examine the effect of financial inclusion on low, medium, high, and very high human development levels of OIC countries. The results revealed that financial inclusion promotes higher human development in countries with medium human development, because of an increase in income and investment in countries that move from low-income level to medium-income status. Institutions are found to promote higher human development in countries with high and very high human development and negatively affect human development in countries with low and medium human development levels. Also, remittance inflows have a positive effect on human development across all levels of human development but stronger in countries at lower levels of human development. Thus, policymakers in OIC should formulate policies that will promote financial inclusion in low- and meddle-income countries to achieve higher human development. In addition, policymakers should revitalize institutions, especially in countries with low and medium human development levels. Also, the cost of sending remittances into OIC should be reduce to attract more remittances into the member countries.


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