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The Effects of Economic and Financial Development on Financial Inclusion in Africa

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Evans, Olaniyi·2015·Review of Economics and Development Studies
DOI 10.26710/reads.v1i1.113
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Abstract

This study provides empirical evidence on the effects of economic and financial development on financial inclusion in Africa, using panel FMOLS for the 2005-2014 period. The study shows that economic growth has a significant positive impact on financial inclusion, meaning that African countries with higher economic growth have more inclusive financial systems. GDP per capita has a significant positive impact on financial inclusion. That is, income is an important factor in explaining the level of financial inclusion in Africa. It is, as well, established in this study, that although both economic and financial development promote financial inclusion, though the effects of economic development are much stronger. Also, inflation is negatively linked to financial inclusion, and as well insignificant across all specifications. Deposit interest rate is positively linked to financial inclusion, though insignificant. The low deposit interest rates in African countries do not encourage inclusive financial systems. Population, though positive, is insignificant. Internet has positive significant impact on financial inclusion, meaning that internet access is indispensable in a fast-moving and digital African economy. Literacy is also statistically significant, meaning that adult literacy is an important factor in explaining the level of financial inclusion in Africa. As well, Islamic banking presence and activity are associated with higher financial inclusion.

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Metadata

Authors
Evans, O.
Corresponding author
Evans, Olaniyi
ORCID
Evans, Olaniyi
Venue
Review of Economics and Development Studies
Publisher
South Punjab Center for Research and Development (SPCRD)
Published
2015-06-30
Volume
1
Issue
1
Pages
21-32
ISSN
  • 2519-9692 (ISSN-L)
  • 2519-9706
DOI
10.26710/reads.v1i1.113
OpenAlex
W2755815515
Cited by
60
References
0
Citations by year
2026: 2 · 2025: 7 · 2024: 11 · 2023: 10 · 2022: 8 · 2021: 9 · 2020: 3 · 2019: 9 · 2018: 1
FWCI
0.80
Type
journal article
Language
en
Open access
Licence
Locations
  • Review of Economics and Development Studies (publishedVersion, cc-by-nc-sa)
  • RePEc: Research Papers in Economics (submittedVersion)
  • Munich Personal RePEc Archive (Ludwig Maximilian University of Munich) (submittedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Microfinance and Financial Inclusion
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Growth and Development
  • Social Sciences › Business, Management and Accounting › Management Information Systems › FinTech, Crowdfunding, Digital Finance
Keywords
financial inclusion, economic development, financial development, economic growth, GDP per capita, inflation, deposit interest rates, internet access, adult literacy, Islamic banking, Africa

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