1. Home
  2. Volume 7 - Number 1
  3. Financial inclusion using corporate social responsibility: a socio-economic demand–supply analysis
New submission
Issues
Journal Information
Aims and ScopeEditorial BoardEditorial Advisory BoardJournal Policies
Resources
For Readers
For Authors
For Editors
For Reviewers
Publication EthicsCall for Special Issue
ISSN
ISSN 2615-9821
ISSN(Previous) 2588-1396

Volume 7 - Number 1 | March 2023

Financial inclusion using corporate social responsibility: a socio-economic demand–supply analysis

Munshi Naser Ibne Afzal, Md Abu Nayeem Sadi, and Shamim Ahmad Siddiqui

28/03/2023 113 0 0
Like Buy now 20.000 đ
CSR Bangladesh Deprived community Financial inclusion

Abstract:

Purpose
Corporate social responsibility (CSR) aims at upholding socio-economic condition of deprived communities prevailing in society as well as bringing profitability for corporate companies themselves. This study investigates to what extent the CSR initiatives of financial institutions in Bangladesh have been able to reach out to deprived communities and support various dimensions of financial inclusion (FI) in the country.

Design/methodology/approach
In this study, both supply-side and demand-side data are included and discussed rigorously as tools to cross-check the result. Both qualitative and quantitative data are incorporated, and graphs and tables are used to represent the critical information better. A triangulation of in-depth interviews with secondary data is used to ensure rigor and trustworthiness. The triangulation approach works as a method to verify secondary data by interviewees in this study.

Findings
The result shows a positive geographical and demographical penetration of CSR activities, but it does not necessarily bring FI in all cases. This study identifies some key issues that prevail in the current context of Bangladesh, such as usage, distance, quality and cost of financial products.

Originality/value
This study makes use of both supply-side and demand-side information and thus explain the reasons behind the involuntary exclusion of financial services.

References:

  1. Adams, C.A. (1999), The Nature and Process of Corporate Reporting on Ethical Issues, CIMA Press, London.
  2. Allen, F., Demirguc-Kunt, A., Klapper, L. and Peria, M.S.M. (2016), “The foundations of financial inclusion: understanding ownership and use of formal accounts”, Journal of Financial Intermediation, Vol. 27, pp. 1-30, doi: 10.1016/j.jfi.2015.12.003.
  3. Azim, M., Ahmed, E. and D'Netto, B. (2011), “Corporate social disclosure in Bangladesh: a study of the financial sector”, International Review of Business Research Papers, Vol. 7 No. 2, pp. 37-55.
  4. Banerjee, A. and Duflo, E. (Eds) (2012), Poor Economics: a Radical Rethinking of the Way to Fight Flobal Poverty, reprint edition, Affairs Public, New York, NY.
  5. Bhattacharya, C.B. and Sen, S. (2004), “Doing better at doing good: when, why, and how consumers respond to corporate social initiatives”, California Management Review, Vol. 47 No. 1, pp. 9-24, doi: 10.2307/41166284.
  6. Bhattacharyya, A., Wright, S. and Rahman, M.L. (2021), “Is better banking performance associated with financial inclusion and mandated CSR expenditure in a developing country?”, Accounting and Finance, Vol. 61 No. 1, pp. 125-161, doi: 10.1111/acfi.12560.
  7. Cámara, N. and Tuesta, D. (2014), “Measuring financial inclusion: a multidimensional index”, BBVA Research Paper, (14/26).
  8. Cámara, N. and Tuesta, D. (2017), “DiGiX: the digitization index”, BBVA Bank, Economic Research Department, 17(03).
  9. Carroll, A. (1979), “A three-dimensional conceptual model of social performance”, Academy of Management Review, Vol. 4 No. 4, pp. 497-505, doi: 10.5465/amr.1979.4498296.
  10. Chakrabarty, K.C. (2012), “Financial inclusion: issues in measurement and analysis”, in Irving Fisher Committee Workshop on Financial Inclusion Indicators, Malaysia.
  11. Chakravarty, S.R. and Pal, R. (2013), “Financial inclusion in India: an axiomatic approach”, Journal of Policy Modeling, Vol. 35 No. 5, pp. 813-837, doi: 10.1016/j.jpolmod.2012.12.007.
  12. Choudhury, T.A. (2010), “Inclusive financing: access to banking services”, Report for the PKSF 20th Anniversary and Development Fair.
  13. Dahlsrud, A. (2008), “How corporate social responsibility is defined: an analysis of 37 definitions”, Corporate Social Responsibility and Environmental Management, Vol. 15 No. 1, pp. 1-13, doi: 10.1002/csr.132.
  14. Demirgüç-Kunt, A. and Klapper, L.F. (2012), “Measuring financial inclusion: the global findex database”, World Bank Policy Research Working Paper, (6025), The World Bank, Washington, DC, available at: https://ssrn.com/abstract=2043012.
  15. Demirgüç-Kunt, A., Klapper, L., Singer, D., Ansar, S. and Hess, J. (2020), “The global findex database 2017: measuring financial inclusion and opportunities to expand access to and use of financial services”, The World Bank Economic Review, Vol. 34 No. 1, pp. S2-S8, doi: 10.1093/wber/lhz013.
  16. Freeman, R.E. (1984), Strategic Management: a Stakeholder Approach, Pitman, Boston.
  17. Freeman, R.E., Wicks, A.C. and Parmar, B. (2004), “Stakeholder theory and the ‘corporate objective revisited’”, Organization Science, Vol. 15 No. 3, pp. 364-369, doi: 10.1287/orsc.1040.0066.
  18. Goss, A. and Roberts, G.S. (2011), “The impact of corporate social responsibility on the cost of bank loans”, Journal of Banking and Finance, Vol. 35 No. 7, pp. 1794-1810, doi: 10.1016/j.jbankfin.2010.12.002.
  19. Haldar, P.K., Rahman, S.M., Mia, M., Ahmed, F. and Bashawir, A. (2016), “Assessing the role of corporate social responsibility practices of commercial banks in enhancing financial inclusion: a study on banking sector in Bangladesh”, International Journal of Economics and Financial Issues, Vol. 6 No. 4, pp. 1778-1783, available at: https://www.econjournals.com/index.php/ijefi/article/view/2927.
  20. Halim, M.A., Islam, S., Aftab Ahmed, A., Uddin, J., Abdul Karim, Siddique, N.E.A., Islam, R. and Fahria, N. (2017), “Impact assessment of agricultural credit program for the sharecroppers in FY16 implemented by BRAC under refinancing scheme of Bangladesh Bank”, 2017, Bangladesh bank, available at: https://www.bb.org.bd/pub/research/sp_research_work/srw1603.pdf.
  21. Honohan, P. (2008), “Cross-country variation in household access to financial services”, Journal of Banking and Finance, Vol. 32 No. 11, pp. 2493-2500, doi: 10.1016/j.jbankfin.2008.05.004.
  22. Islam, M.K. and Kabir, M.A. (1995), “Corporate social audit- a case study of some selected enterprise”, Management Development, Vol. 24, pp. 45-55.
  23. Klugman, J. (2011), “‘Human development report 2011: sustainability and equity: a better future for all’, UNDP-HDRO human development reports”, available at: https://ssrn.com/abstract=2294671.
  24. Kumar, K. (2013), “Sustainability performance measurement: an investigation into corporate best practices, (Doctoral dissertation, PhD Thesis)”, National Institute of Development Administration, available at: http://libdcms.nida.ac.th/thesis6/2013/b182009.pdf.
  25. Lee, M.H., Mak, A.K. and Pang, A. (2012), “Bridging the gap: an exploratory study of corporate social responsibility among SMEs in Singapore”, Journal of Public Relations Research, Vol. 24 No. 4, pp. 299-317, doi: 10.1080/1062726X.2012.689898.
  26. Lockett, A., Moon, J. and Visser, W. (2006), “Corporate social responsibility in management research: focus, nature, salience and sources of influence”, Journal of Management Studies, Vol. 43 No. 1, pp. 115-136, doi: 10.1111/j.1467-6486.2006.00585.x.
  27. McDonald, L. and Rundle-Thiele, S. (2008), “Corporate social responsibility and bank customer satisfaction: a research agenda”, International Journal of Bank Marketing, Vol. 26 No. 3, pp. 170-182, doi: 10.1108/02652320810864643.
  28. Ndiweni, E., Haque, F. and Hassan, M.K. (2018), “Corporate social responsibility practices of banks in Bangladesh: a structuration theory perspective”, Investment Management and Financial Innovations, Vol. 15 No. 1, pp. 350-360.
  29. Park, C.Y. and Mercado, R. Jr (2015), “Financial inclusion, poverty, and income inequality in developing Asia”, Working Paper Series No. 426, Asian Development Bank Economics, doi: 10.2139/ssrn.2558936.
  30. Pearce, D. and Ortega, C.R. (2012), “‘Financial inclusion strategies: reference framework’ World Bank Group”, available at: https://policycommons.net/artifacts/1509114/financial-inclusion-strategies/2176748/on16May2022.CID:20.500.12592/zm09kc.
  31. Reed, D. (2002), “Employing normative stakeholder theory in developing countries: a critical theory perspective”, Business and Society, Vol. 41 No. 2, pp. 166-207, doi: 10.1177/0007650302041002003.
  32. Russo, A. and Perrini, F. (2010), “Investigating stakeholder theory and social capital: CSR in large firms and SMEs”, Journal of Business Ethics, Vol. 91, pp. 207-221, doi: 10.1007/s10551-009-0079-z.
  33. Saha, A.K., Dey, S. and Khan, A. (2013), “Corporate Social Responsibility in Bangladesh: A Comparative Study of Commercial Banks of Bangladesh”, The Bangladesh Accountant, Vol. 13, pp. 69-80, April-June, 2013.
  34. Sarma, M. (2008), “Index of financial inclusion”, Working paper (No. 215), Indian Council for Research on International Economic Relations (ICRIER), New Delhi, available at: https://www.econstor.eu/econbiz-search.
  35. Sarma, M. (2015), “Measuring financial inclusion”, Economics Bulletin, AccessEcon, Vol. 35 No. 1, pp. 604-611, available at: https://ideas.repec.org/a/ebl/ecbull/eb-14-00854.html.
  36. Sarma, M. and Pais, J. (2011), “Financial inclusion and development”, Journal of International Development, Vol. 23 No. 5, pp. 613-628, doi: 10.1002/jid.1698.
  37. Scholtens, B. (2009), “Corporate social responsibility in the international banking industry”, Journal of Business Ethics, Vol. 86 No. 2, pp. 159-175, doi: 10.1007/s10551-008-9841-x.
  38. Sen, A. (1999), Development as Freedom, Oxford University Press, New York.
  39. Siddik, M.N.A., Sun, G., Yanjuan, C.U.I. and Kabiraj, S. (2014), “Financial inclusion through mobile banking: a case of Bangladesh”, Journal of Applied Finance and Banking, Vol. 4 No. 6, pp. 109-136.
  40. Uddin, A., Chowdhury, M.A.F. and Islam, M.N. (2017), “Determinants of financial inclusion in Bangladesh: dynamic GMM and quantile regression approach”, The Journal of Developing Areas, Vol. 51 No. 2, pp. 221-237, available at: https://www.jstor.org/stable/26415735.
  41. Ullah, M.S. (2013), “Corporate social responsibility practices in the banking sector in Bangladesh-an assessment”, Bank Parikrama, Vol. XXXVIII Nos 3-4, pp. 129-152.
  42. Vázquez-Carrasco, R. and López-Pérez, M.E. (2013), “Small and medium-sized enterprises and Corporate Social Responsibility: a systematic review of the literature”, Quality and Quantity, Vol. 47 No. 6, pp. 3205-3218, doi: 10.1007/s11135-012-9713-4.
  43. Zins, A. and Weill, L. (2016), “The determinants of financial inclusion in Africa”, Review of Development Finance, Vol. 6 No. 1, pp. 46-57, doi: 10.1016/j.rdf.2016.05.001.

Further reading

  1. Andreasen, A.R. (2003), “The life trajectory of social marketing: some implications”, Marketing Theory, Vol. 3 No. 3, pp. 293-303, doi: 10.1177/147059310333004.
  2. Bangladesh Bank (2019), “Annual Report 2018-2019”, available at: https://www.bb.org.bd/pub/annual/anreport/ar1819/index1819.php (accessed 29 April 2021).
  3. Brown, T. and Wyatt, J. (2010), “Design thinking for social innovation”, Development Outreach, Vol. 12 No. 1, pp. 29-43, doi: 10.1596/1020-797X_12_1_29.
  4. Carlos Fandos Roig, J., Estrada Guillén, M., Forgas Coll, S. and Palau i Saumell, R. (2013), “Social value in retail banking”, International Journal of Bank Marketing, Vol. 31 No. 5, pp. 348-367, doi: 10.1108/IJBM-02-2013-0013.
  5. Halder, P.K. and Rahman, S.M. (2014), “An insight into corporate social responsibility practices of commercial banks in Bangladesh”, Bangladesh Research Publications Journal, Vol. 10 No. 1, pp. 25-32.
  6. Ite, E.U. (2004), “Multinationals and corporate social responsibility in developing countries: a case study of Nigeria”, Corporate Social Responsibility and Environmental Management, Vol. 11 No. 1, pp. 1-11, doi: 10.1002/csr.49.
  7. Lefebvre, R.C. (2011), “An integrative model for social marketing”, Journal of Social Marketing, Vol. 1 No. 1, pp. 54-72, doi: 10.1108/20426761111104437.
  8. Leyshon, A. and Thrift, N. (1995), “Geographies of financial exclusion: financial abandonment in britain and the United States”, Transactions of the Institute of British Geographers, Vol. 20 No. 3, pp. 312-341, doi: 10.2307/622654.
  9. Mercer, J.J. (2003), Corporate Social Responsibility and its Importance to Consumers, The Claremont Graduate University, California.
  10. Truscott, R.A., Bartlett, J.L. and Tywoniak, S.A. (2009), “The reputation of the corporate social responsibility industry in Australia”, Australasian Marketing Journal, Vol. 17 No. 2, pp. 84-91, doi: 10.1016/j.ausmj.2009.05.001.
  11. Visser, W., Matten, D., Pohl, M. and Tolhurst, N. (2007), The A to Z of Corporate Social Responsibility: a Complete Reference Guide to Concept, Codes and Organizations, John Wiley & Sons, New York.

Related articles