Sustainable Banking & Financial Inclusion in the Global South : the “S” in ESG

Currently, only 71% of adults in the global South have real access to financial services, compared to 96% in the developed world. Financial inclusion has been identified as one of the most potent factors lifting people out of poverty and enabling development and well-being. As a result, access to financial services is a crucial objective of the United Nations Sustainable Development Goals. We investigate the impact on financial inclusion in the global South by multinational banks (MNBs) implementing the Social aspect of the ESG criteria. A sample of 152 MNBs, 32 developing countries, and 37,952 individuals yields evidence of the positive effect of such practices on three dimensions of financial inclusion. Specifically, when MNBs incorporate several Social dimensions into their business models, improve the access to bank accounts, the opportunity to obtain credit, and save money for the underprivileged in the developing world