The impact of financial inclusion on liquidity risks – an applied study of the National Bank of Algeria during the Period 2017–2024

Abstract

The study aims to analyze the impact of digital financial inclusion on liquidity risk in banks through a case study of the National Bank of Algeria over the period 2017–2024, by constructing a composite index of digital financial inclusion based on a set of indicators related to the use of digital channels, as well as a composite index of liquidity risk based on several financial ratios associated with bank liquidity. The Ordinary Least Squares (OLS) regression model was used to estimate and statistically analyze the relationship between the two variables. he results revealed a positive and statistically significant relationship between digital financial inclusion and liquidity risk, indicating that the expansion of digital banking services increases the level of liquidity risk in the bank under study. This finding can be explained by the fact that digitalization accelerates the movement of funds and facilitates cash withdrawals, thereby imposing additional challenges on liquidity management. The study highlights the importance of strengthening liquidity management mechanisms and developing supervisory tools to keep pace with the expansion of digital financial inclusion