The role of financial inclusion and monetary policy on bank financial stability in SADC countries

Abstract

This study aims to analyze the role of financial inclusion and monetary policy on financial stability in Southern African Development Community (SADC) countries and contributes to the scarce literature considering the role of education, over the period 2005–2018 employing the Feasible Generalized Least Squares (FGLS) estimation method. The result shows that increased financial inclusion, competitiveness in the banking industry, education and inflation control are key factors to ensure banks' financial stability. Regarding policy implication the study suggests that policy makers in SADC countries prioritize financial inclusion programs for their effect on household welfare and banking sector and as social implication the study indicates that access to education at least up to secondary level is important for sustaining financial stability.