GREEN GROWTH INDEX AND FINANCIAL INCLUSION
GREEN GROWTH INDEX AND FINANCIAL INCLUSION

Summary/Abstract: After the appearance of the global financial crisis in 2008, efforts to transition to a green economy based on sustainable development began, both at the national and international levels. With the development of the financial sector and the growth of the economy, there is an increasing impact on the environment and human health. Green growth has recently received considerable attention as countries and their inhabitants face ever greater, more difficult and complex social, environmental, financial and economic challenges and periods of crisis. This paper examines and further explains the basic determinants of green growth and financial inclusion of countries, as very important determinants of financial and economic sustainable growth and development of countries in the modern era. Therefore, the main goal of the paper is to determine whether there is a connection between the Green Growth Index and the financial inclusion of countries. Financial inclusion is expressed using the number of commercial bank branches and the share of loans to the private sector in the country's gross domestic product. Selected countries of the Western Balkans (Albania, Bosnia and Herzegovina, North Macedonia, Montenegro and Serbia) were used in the research, and the research period is 2010-2021. The paper used panel data, which will be explained using descriptive statistics and correlation analysis, and processed in the STATA software package. The main conclusion of the research is that the financial inclusion of the observed countries is statistically negatively related to the Green Growth Index. Therefore, it is up to the governments of those countries to introduce and implement policies that increase financial inclusion and the development of the banking sector, but in a way that is consistent with encouraging green growth, that is, preventing environmental degradation.

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