Empirical Analysis of Financial Inclusion's Role in Economic Growth and Poverty Reduction in Sub-Saharan Africa

Abstract

This research aims to investigate the correlation between financial inclusion (FI), economic growth (EG), and poverty reduction in several Sub-Saharan African (SSA) countries throughout the period of 2014-2021. The research used the generalized method of moments (GMM) econometric methodologies. A financial inclusion (FI) composite index was constructed using principal component analysis (PCA) to include the many attributes of FI indicators. The findings indicate a positive and significant impact of financial inclusion on economic development and a reduction in poverty in Sub-Saharan Africa. These results emphasize the crucial significance of legislators and governments giving priority to policies that enhance the availability, utility, and accessibility of financial goods and services. The outcome will include a reduction in poverty and an increase in equitable economic progress throughout Sub-Saharan Africa.