As part of the overall goals for economic and financial growth, developing nations are working to promote financial inclusion, or increased access to financial services for low-income families and businesses. This prompts the query of whether, generally speaking, financial stability and financial inclusion are alternatives or complements. Do efforts to enhance financial inclusion tend to improve or worsen financial stability, in other words? Financial inclusion may have both beneficial and negative effects on financial stability, according to a number of studies, although there haven't been many empirical investigations of this link. This is due in part to the dearth and relative youth of the statistics on financial inclusion. By evaluating the impact of several financial inclusion measures (along with certain control variables) on various financial stability metrics, such as bank non-performing loans and bank Z-scores, this study adds to the body of knowledge on the issue. We find modest evidence that more lending to small and medium-sized businesses (SMEs) promotes financial stability, primarily by lowering the number of non-performing loans (NPLs) and the likelihood that financial institutions would default. This indicates that governmental initiatives to promote financial inclusion—at least among SMEs—would also have the unintended consequence of promoting financial stability.