A Mediating Role of Financial Self-Efficacy (FSE) between the Relationship of Financial Inclusion and Economic Growth in Khyber Pakhtunkhwa, Pakistan

Abstract

The study was conducted to check the effect of financial inclusion on economic growth in Khyber Pakhtunkhwa with mediating role of financial self efficacy. The study has included SMEs for the conducting this study. The study has included those SMEs who are maintaining banks accounts and proper account reports, having credit facilities and loans. The study gathered data from the Small and Medium Enterprises (SMEDA) main office Peshawar. Conveniently, 400 respondents were included in the data collection process. The study used survey approach and questionnaire method was adopted for the data collection. The findings of reliability statistics showed that all the variables included were found reliable.
The results of regression showed access to banking services, credit facilities, insurance facility and financial product showed positive and significant effect on the economic growth. The mediating role of FSE suggested that the R-square value without FSE is 0.647 while it has been increased to 0.821 when FSE was introduced between financial inclusion and economic growth. The positive change in the R-square confirmed the significant mediating role of FSE between financial inclusion and economic growth.