Socio-economic and Security Effects of Financial Exclusion in Africa: An Experts’ View

Abstract

Financial exclusion in Africa has significant social, economic and security implications that hinder economic development and perpetuate inequality. Financial exclusion in Africa limits access to formal financial services for marginalized populations, exacerbating economic inequality and impeding wealth accumulation. It also hampers entrepreneurial activities and stifles economic growth by restricting small and medium-sized enterprises (SMEs) from accessing credit and financial resources. Moreover, financial exclusion creates barriers to essential services such as education, healthcare, and housing, exacerbating social inequalities and exclusion. Additionally, it increases vulnerability to fraudulent activities and illicit networks, posing security risks within societies. Addressing financial exclusion requires a collaborative approach involving governments, financial institutions, FinTech companies, and civil society organizations. This approach focuses on enhancing financial literacy, expanding access to affordable and inclusive financial products, leveraging technology and digital solutions, and establishing an enabling regulatory environment. By prioritizing financial inclusion, Africa can reduce poverty, stimulate economic growth, promote social integration, and enhance security within societies. Implementing inclusive financial policies and embracing technological innovations are crucial steps toward building a more inclusive and resilient financial ecosystem in Africa.