Financial Inclusion and Economic Growth in Albania

Abstract

Access to finance has become a fundamental accelerator of inclusive economic development and growth especially in developing countries. Financial inclusion enhances entrepreneurship and savings and allocates resources more efficiently. This study examines the relationship of financial inclusion and economic growth in Albania from 2010 to 2023, based on data gathered from the World Bank, IMF and Bank of Albania. Using descriptive statistics and linear regression models, the paper examines the effect of banking sector indicators such as domestic credit to private sector, account ownership, and extent of digital payments on GDP growth. The coefficients reflect a strong positive association (R² = 0.71, p < 0.01) and power the evidence to support the contention that improved financial inclusion is significantly associated with economic performance. But enduring shortfalls in financial literacy, rural access and digital infrastructure are significant obstacles that remain to be tackled. The expansion of digital banking, enhancing financial education and SME access to credit will be needed in order to promote inclusive growth and long-term financial stability in Albania and other economies.