Access to Finance and Human Development in Sub-Saharan Africa

Abstract

The study examines the relationship between access to finance and human development in Sub-Saharan Africa. The study used a panel data covering the period 2004–2021and employed the two-step system Generalized Method of Moments for the analysis of the data. The indicators of financial access used in the study are number of bank branches, commercial bank private sector credits and number of automatic teller machines (ATM) per. The study found that commercial bank private sector credits and number of number of automatic teller machines per 1000 adults have a positive and significant relationship with human development index in Sub-Saharan Africa. Base on the findings, the study recommends that the government of various Sub-Saharan African countries should intensify efforts to increase the access to financial services for the poor and low income group. This include reducing the costs and charges on credits for the low income earners and building more bank agents and automatic teller machines that will provide financial services to the populace especially the unbanked. The findings of the study lead to the conclusion that most Sub-Saharan African countries need to do more to boost access to finance for the unbanked and low income earners.