AN INVESTIGATION OF THE IMPACT OF FINANCIAL INCLUSION ON ECONOMIC GROWTH: EVIDENCE FROM AFRICAN COUNTRIES
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Date
2022
Journal Title
Journal ISSN
Volume Title
Publisher
Asian Economic and Financial Review
Abstract
Financial inclusion has been recognized as a development policy priority and a key to
economic growth in developing economies. Essentially, most Sub-Saharan African (SSA)
countries have witnessed unstable economic growth over the last three decades. Financial
inclusiveness is fundamental to sustainable growth for any economy. This study
investigates the effects of financial inclusion on 41 Sub-Saharan African countries from
2004–2019, employing the generalized method of moments (GMM) method and a
Granger causality analysis. The results show a positive relationship between financial
inclusion and economic growth. The non-causality tests revealed bi-directional causality
between the variables for the whole region and low-income and lower-middle-income
countries. Furthermore, a unidirectional causality runs from financial inclusion to
economic growth in upper-middle-income countries. The study concluded that financial
inclusion positively affects the economic growth of SSA and recommends that policies
and interventions be redefined in the financial system to achieve steady economic growth
and sustainability