Financial Inclusion In Sub-Saharan Africa Research Articles

The Impact of FinTech Adoption on Traditional Financial Inclusion in Sub-Saharan Africa

The Impact of FinTech Adoption on Traditional Financial Inclusion in Sub-Saharan Africa

Anti-Money Laundering Compliance and Financial Inclusion: A Technical Analysis of Sub-Saharan Africa

This review paper examines the intersection of Anti-Money Laundering (AML) compliance and financial inclusion in Sub-Saharan Africa. It analyzes the impact of AML regulations on access to financial services, the financial burden on institutions, and the effectiveness of risk-based approaches. Policy recommendations focus on balancing AML requirements and inclusion objectives, enhancing regulatory and institutional capacities, and fostering innovation and collaboration. The future outlook considers technological advancements and regulatory trends shaping the region's AML regulation and financial inclusion dynamics.

Sustainable development goals: Attaining sustainable living through financial inclusion in Sub-Saharan Africa

This study examines the effect of financial inclusion on sustainable living in 20 sub-Saharan African countries using the panel Autoregressive Distributive Lag (ARDL) model. The findings indicate that FII, the numbers of borrowers, depositors, bank branches and automated teller machines exert a significant effect on GDP per capita in sub-Saharan Africa. The Pooled Mean Group (PMG) estimates further indicate that FII (which captured the combined effect of financial access and usage) exerts a negative effect on gross domestic product (GDP) per capita in sub-Saharan Africa (SSA). However, the results of the individual measures of financial inclusion, that is, the numbers of borrowers, depositors and banking penetration exert a positive effect on gross domestic product (GDP) per capita in the long run in sub-Saharan Africa. This portends that financial inclusion is a significant contributor that can improve sustainable living conditions in sub-Saharan Africa. Based on these, the study recommends the need to improve access to and usage of financial products and services through user-friendly and service-fluent financial technologies in sub-Saharan Africa. This will help increase the number of households, smallholder farmers and businesses to access the formal financial system to meet their reoccurring and precautionary funding needs in sub-Saharan African countries.

The effect of financial development and legal institutions on financial inclusion in Sub-Saharan Africa

Purpose of the studyThis study examines the impact of financial development on financial inclusion and the moderating role of legal institutions in enhancing the effect of financial development on financial inclusion in sub-Sahara Africa. The previous literature does not explain how financial development could improve financial inclusion even though the systems theory of financial inclusion argues so. Design/methodology/approachUsing data from WDI for 41 sub-Sahara Africa countries between, 2000–2020, a two-step system GMM and quantile regression models are used to estimate the objectives of the study. The study takes into consideration the exceptional impact of COVID-19 and the importance of internet usage, along with other macroeconomic factors. FindingsThe sys-GMM shows that financial development positively influences financial inclusion. Across diverse measures of financial development and estimation techniques, a consistent and significant positive relationship is observed. Furthermore, the quantile regression approach reveals that at the 25th,50th, and 75th quantile of financial inclusion, the effect of financial development is positive. In both the sys-GMM and quantile regression, the effect of institutions on financial inclusion is positive and also positively moderate the association between financial development and inclusion. Financial is influenced by other key macroeconomic variables. Recommendations/valueThe study recommends that Governments and policymakers prioritize initiatives aimed at advancing financial development in sub-Saharan Africa. Additionally, enhancing the legal and regulatory environment governing financial services, encompassing aspects such as contract enforcement, property rights protection, and corruption reduction, is crucial for sustained financial inclusion. ImplicationsOpen innovation in the financial sector, particularly in mobile payments, can benefit from the positive impact of financial development on inclusion. Also, open innovation in delivery services can benefit from financial inclusion initiatives, ensuring that individuals and businesses across diverse economic strata have access to efficient and affordable financial delivery services.

The impact of network coverage on adoption of Fintech and financial inclusion in sub-Saharan Africa

Digital finance plays a major role in improving access to, usage and quality of financial services in developing countries. The use of these platforms has been associated with a positive impact on economic growth and people’s welfare. They allow for convenient, secure, and efficient transaction and are the crucial element of e-commerce. In this paper, we analyse the effect of mobile network coverage on adoption of financial technologies and financial inclusion using a survey data of 12,735 individuals from nine sub-Saharan African countries conducted in 2017. By combining survey data with information on the proximity of mobile network towers, we estimate a two-stage model. In the first stage, consumers decide to adopt a technology device, and in the second stage, they decide whether to use digital financial services or not. Results show a significant and positive relationship between network coverage and adoption of digital financial services. Considering that the whole population lives within 2 km radius from the LTE tower, financial inclusion would increase by 6% in Mozambique and 3% in Ghana, Rwanda and Senegal. In Tanzania, where mobile money is the common financial service, investment in GSM and UMTS would have a larger impact on financial inclusion than LTE. These results show that digital financial technologies such as mobile money, mobile banking and e-wallet, that do not necessarily require consumers to be connected to the Internet have a greater impact on financial inclusion in East African countries, where financial service innovations are mobile led. However, in countries where digital financial innovations are bank led, LTE coverage have a greater impact than GSM and UMTS coverage. The findings of this study can help policy-makers to understand the issues related to the expansion of digital financial services and effective strategies to deliver these services to the poor.

Financial Technology and Financial Inclusion in Sub-Saharan Africa: New Evidence From A Dynamic Panel Causality Approach

Financial Technology and Financial Inclusion in Sub-Saharan Africa: New Evidence From A Dynamic Panel Causality Approach

FinTech and Financial Inclusion in Sub-Saharan Africa: A Comparative Analysis

The UN 2030 agenda for sustainable development underscores the crucial role of financial inclusion in achieving the Sustainable Development Goals (SDGs). The rapid evolution of FinTech innovations is significantly reshaping the global financial industry and facilitating mobile phone efforts to promote financial inclusion. This technological advancement is projected to foster stability within the financial system, mitigate poverty rates, reduce income inequality, and stimulate economic growth. This study evaluates the impact of mobile FinTech on financial inclusion in 18 Sub-Saharan African (SSA) countries using data from the Global Findex database for 2014-2021, as well as the World Development Indicators database. The research employs principal component analysis (PCA) to construct a financial inclusion index and uses random effects, fixed effects, panel corrected standard errors (PCSE), and generalized method of moments (GMM) models. The empirical findings reveal that mobile FinTech significantly enhances financial inclusion, with the payment component of mobile FinTech having a greater impact than mobile money accounts.

Determinants of Sustainable Financial Inclusion in Sub-Saharan Africa: A System GMM Approach

Determinants of Sustainable Financial Inclusion in Sub-Saharan Africa: A System GMM Approach

Mobile money and financial inclusion in Sub-Saharan Africa

In this paper, we utilize survey data collected in 2017 from 12,735 individuals across nine Sub-Saharan African countries. We merge the survey data with geographic information related to the proximity of mobile network towers and banking facilities, based on the geo-locations of the respondents. Our estimation approach comprises a two-stage model. In the first stage, consumers make choices between adopting a feature phone or a smartphone. In the second stage, they make decisions regarding the use of mobile money services. Our findings reveal that network coverage significantly influences the adoption of mobile phones. Moreover, we observe that mobile money services are more favored by younger and relatively wealthier individuals for sending money, while older individuals and those with lower incomes tend to use mobile wallets for receiving money. Consequently, mobile money services facilitate younger migrant workers residing in areas with better infrastructure in providing support to their older relatives in less developed regions.

FINANCIAL INCLUSION, INSTITUTIONAL EFFICIENCY AND UNDERNOURISHMENT IN SUB-SAHARA AFRICA

The governments of Sub-Saharan African (SSA) countries and international organizations have undertaken a variety of undernourishment-targeting initiatives, such as financial inclusion, humanitarian interventions, social reengineering and institutional changes, in line with the United Nations' top priority of eradicating undernourishment as articulated in the Sustainable Development Goals (SDGs). We have investigated the crucial role that institutional quality plays in diminishing the prevalence of undernourishment through financial inclusion in sub-Saharan Africa. With a time, scope of 18 years and a cross-sectional scope of 29 SSA nations, we used the system generalized Methods of Moments (system-GMM) in a panel data setting for our analysis. For the linear system-GMM, we discovered a strong positive self-replicating effect of prevalence of undernourishment, diverse effects of financial inclusion, and an unremarkable role of institutions. However, in the context of a nonlinear system-GMM method, the role of institutions strengthens the impact of financial inclusion. Therefore, we stressed the need for relevant authorities to develop informed policy alternatives that are based on instantaneous surveillance of changes in prevalence of undernourishment in the SSA region.

Governance Mediates the Effect of Remittances on Financial Inclusion in Sub-Saharan Africa

Governance Mediates the Effect of Remittances on Financial Inclusion in Sub-Saharan Africa

Fintechs and the financial inclusion gender gap in Sub-Saharan African countries

This study addresses the issue of financial innovation in developing countries, focusing specifically on the role fintechs have in closing the gender gap of financial inclusion in Sub-Saharan Africa (SSA) over the period 2011–2017. The empirical evidence is based on the multilevel tobit regression model fitted to panel data. The results of this study show that fintechs reduce the financial inclusion gender gap by mitigating the gender gap in access to and use of financial services. Furthermore, the results cast doubt on the ability of fintechs development to bridge this gap on its own, and hint on the joint importance of targeted policy initiatives aimed at directly closing the gender gap to this end. These findings have important economic policy implications and provide evidence of improved economic conditions for women in terms of financial inclusion or narrowing of the gender gap.

Digital financial inclusion and energy and environment: Global positioning of Sub-Saharan African countries

The Bretton Woods institutions and the G20 have undertaken the initiative to promote financial inclusion in Sub-Saharan Africa and South Asia to reduce the high rate of economic poverty. Due to advanced technology in financial services, Sub-Saharan Africa and South Africa have included a lot of people in the financial system. Thereby digital financial inclusion influences energy consumption and the environment by their pass-through effect on economic growth. This paper evaluates the expansion of innovative digital services and financial inclusion on energy consumption and the environment in different countries according to their geographical position. Regarding socio-economic indicators and the proportion of people who claim to be owners of an account at a bank or financial institution, SSA is still stagnating in poverty and has the lowest percentage compared to other regions. Using the Global Findex data, we find that higher financial inclusion proxies are related to higher energy consumption and CO2 emission. At the same time, the relationship is not always linear between technology, energy consumption and CO2 emission.

Digital technologies and financial inclusion in Sub-Saharan Africa

The study investigates the digital technology-financial inclusion nexus in 43 Sub-Saharan African countries between 2004 and 2019. The methodologies are the Generalized Method of Moment (GMM) to take care of double causality and country heterogeneity and IV-Tobit to take into account the limited range in the dependent variables. At all levels, digital technology measured by ICT indicators of the subscription rate of fixed and mobile telephone users, fixed broadband, internet users and a composite indicator of digitalization have positive significant effects on financial inclusion. A further robustness check is conducted by computing a composite indicator of financial inclusion to determine how it is affected by digital technology. The findings indicate that the rate of financial inclusion in Sub Saharan Africa rises with increasing digital technologies. There should be more investments in terms of promoting financial and technological infrastructures and also in the human capital sector since financial literacy can play an important part in promoting financial stability and inclusive finance in Africa.

The role of governance in the effect of the internet on financial inclusion in sub-Saharan Africa

The role of governance in the effect of the internet on financial inclusion in sub-Saharan Africa

Financial inclusion and physical health functioning among aging adults in the sub-Saharan African context: Exploring social networks and gender roles.

It remains poorly understood how financial inclusion influences physical health functioning in later life in sub-Saharan African context and whether the association differs by gender and social relationships. We aim 1) to examine the associations of financial inclusion with functional impairment during older age in Ghana; and 2) to evaluate whether gender and social networks modify this association. The cross-sectional analyses are based on a sample (N = 1,201) of study participants aged 50 years and over (M = 66.5 years, SD = 11.9, 63.3% female) deriving from the 2016-2017 AgeHeaPsyWel-HeaSeeB Study. Ordinary least squares (OLS) regression analyses with interactions were performed to estimate the link between financial inclusion and functional health and how the association is modified by gender and older age social networks. The mean financial inclusion score was 1.66 (SD = 1.74) in women and 2.33 (SD = 1.82) in men whilst mean activities of daily living (ADL) score was 13.03 (SD = 4.99) and 14.85 (SD = 5.06) in women and men respectively. We found that financial inclusion was associated with decreases in ADL (total sample: β = -.548, p < .001; women: β = -.582, p < .001; men: β = -1.082 p < .001) and instrumental ADL (IADL) (total sample: β = -.359, p = .034; women: β = -.445, p = .026 but not in men). Social networks significantly moderated the association of financial inclusion with ADL such that the financially included who were embedded in a stronger constellation of social networks were 6% less likely to report ADL impairment compared to those with weaker social networks (β = -.062, p = .025). The study provides empirical evidence for a better understanding of the association between financial inclusion and physical health functioning in the context of later life social networks. Interventions for functional health through financial inclusion in sub-Saharan Africa should include improving interpersonal and social networks for older adult and also through gender lenses.

Are Mobile Money and Financial Accounts Complementary? Evidence from the WAEMU Region

The recent mobile money innovation has experienced strong development and has been a key tool for financial inclusion in sub-Saharan Africa. Even holders of formal financial accounts have adopted it widely. Based on a sample of 6,891 households in the West African Economic and Monetary Union (WAEMU), we study complementarity between the use of mobile money and financial accounts. Our empirical results show that households generally perceive mobile money and financial accounts as substitutes. We also found that individuals for whom the two accounts are complementary have a high level of education and live in countries where formal financial and mobile money services are more accessible. Moreover, contrary to previous works, we show that among those holding two complementary accounts, almost 50% find that the formal financial account is a complement of mobile money. We attribute this preference to a very low use of financial services such as formal savings and borrowings in WAEMU.

The Impact of the Mobile Money on People’s Use of Financial Services in Sub-Sahara Africa

Abstract This paper details the impact of mobile money financial technology on financial inclusion in Sub-Saharan Africa. The research methodology used was descriptive research design with the use of secondary information sources to collect panel data. The research model had Financial Technology as the independent variable and the dependent variable was Financial Inclusion. The analysis of data was done using Stata 15. From the interpretation of the findings using the panel data on the 14 selected Sub-Saharan countries, it was found that the increase in the number of registered mobile money agents per 100,000 adults led to an increase in the total number of people using the financial services per 100,000 adults in Sub-Sahara Africa. Furthermore, the relationship between the registered mobile money agents per 100,000 adults and the total number of people using financial services was proven to be significant at a 5% level of significance.

Mobile money for financial inclusion in Rwanda Application of endogenous switching regression model

As in many developing countries, mobile money was justified as a significant tool of financial inclusion in Sub-Saharan Africa. This study attempts to identify the factors motivating Rwandans to use the mobile money using the FinScope 2016 survey data collected from a random sample of 12,480 individuals. Considering that adopting and using mobile money is optional, the maximum likelihood method was used to estimate an endogenous switching regression model to account for sample selection and endogeneity. The results put forward the role of socioeconomic factors, wealth and productive assets on saving promotion. Mobile money contributes significantly on saving promotion; it is thus a factor to boost the financial inclusion and a leverage point of socioeconomic development through the enhancement of inclusive growth. Based on the research findings, it is recommended that exploring the mechanisms and strategies to put in place a cashless economic system would improve the socioeconomic transformation in Rwanda. [enter Abstract Body]

Institutional Environment and Financial Inclusion in Sub-Saharan Africa

The purpose of this study is to analyze the effect of institutional factors on financial inclusion through the lens of the integration of mobile money. To achieve this objective, a multiple regression model is chosen, justified by the acceptance of the null hypothesis that the specified endogenous regressor, in our case GDP per capita, can indeed be treated as exogenous. The estimation of this model by Ordinary Least Squares (OLS) using data from the World Development Indicators (WDI) and the World Governance Indicators (WGI) databases reveals that the quality of regulation is, a priori, the only institutional factor affecting financial inclusion since it is a driver of financial inclusion in SSA. This result, which corroborates the theory of financial liberalization, makes it possible to identify economic policy implications supporting the implementation of incentive-based regulation in the banking system and the regulation of the mobile money sector.