Financial inclusion and risk – taking behavior: Empirical evidence from the Vietnamese Banking sector

Abstract

On January 22, 2020, the Prime Minister issued Decision No. 149/QD-TTG approving the National Comprehensive Financial Strategy to 2025, with a vision to 2030. Many studies show that Banks have always played an important role in promoting financial inclusion in countries. Therefore, banks need to consider financial inclusion as a major business opportunity and perfect the business model. This study focuses on analyzing the aspects of financial inclusion as well as the risk-taking behavior of the banking system, assessing in the most general and accurate way the impact of financial inclusion. on the risk-taking behavior of the banking system of 33 banks in Vietnam in the period 2011-2021. Empirical evidence shows that the higher the leverage ratio, the more banks in Vietnam tend to accept financial risks. In contrast, banks will tend to be less risk-averse with high overall performance, high capital adequacy ratio, high bank concentration, and high average return on assets.