Applying engineering principles to financial inclusion in Ecuador: A VEC model analysis of economic growth trends

Abstract

Financial inclusion is currently considered an important strategy to strengthen the economic growth of countries, especially developing ones. This study seeks to examine the impact that financial inclusion variables have had on the economic growth of Ecuador using quarterly time series information that corresponds to the period between 2020 and 2023. An error correction model was used, taking the Product Gross Domestic as a dependent variable and having as financial inclusion variables the credit granted by financial institutions with respect to GDP and the relationship credit granted by financial institutions with deposits; Other control variables were also used, such as liquidity in the broad sense (M2) in relation to GDP and the liquidity of banks and cooperatives. The study concluded that financial inclusion has a positive and significant impact on economic growth in Ecuador through the Credit variable; Additionally, in the short term all variables are related to each other, although in the long term only the variables M2/GDP and Credits/deposits influence the behavior of GDP.