Analysis of the Relationship Between Financial Inclusion and Credit Risk in Algerian Commercial Banks During the Period 2010–2022 Using Meta Analysis and Panel Data Modeling

Abstract

This study aims to analyze the relationship between financial inclusion and credit risk in Algerian commercial banks by examining the impact of expanding financial services on the stability of credit portfolios. The importance of the study stems from its attempt to fill an existing research gap through the adoption of an integrated econometric approach that combines metaanalysis with panel data modeling. The study focuses on measuring the effect of the three dimensions of financial inclusion (access, usage, and quality) on the ratio of non-performing loans. To achieve this objective, a dual quantitative methodology is employed. First, a meta-analysis is conducted on a sample of twenty international studies to estimate the overall effect size of the relationship. Second, a panel data model is developed using a sample of ten Algerian banks over the period (2010–2022), based on a composite financial inclusion index tested for reliability and consistency. The findings indicate that the effectiveness of financial inclusion in reducing credit risk is not solely associated with the quantitative expansion of financial services, but depends primarily on the quality of these services. Accordingly, the study recommends directing policies toward strengthening digital infrastructure and promoting financial literacy to ensure sustainable financial inclusion that supports financial stability