Financial Inclusion : African Scenario

Abstract

This paper attempts to study the extent of financial inclusion in Africa with Financial Inclusion Index (FII). The two-dimensions on which FII was measured are financial access index and financial usage index. This study was conducted on the backdrop of the absence of such an index for the African continent. The data for this study was taken from the Financial Access Survey of the International Monetary Fund. The region-wise analysis of financial inclusion index shows that the northern African countries are sound in financial inclusion followed by the east African countries, which are considered as the poorest economies of the world. The study proves the direct relationship between financial access and financial usage. The study concludes that the financial inclusion is very low in major parts of Africa, since 84 percent of the total sample countries fall in the Low Financial Inclusion category. It is suggested the financial products have four critical elements, viz. convenience, reliability, flexibility and continuity in order to achieve greater financial inclusion in Africa.