Financial inclusion: A pathway to economic growth in Sub‐Saharan African economies

Muri Wole Adedokun and Mehmet Ağa

International Journal of Finance & Economics, 2023, vol. 28, issue 3, 2712-2728

Abstract: This study empirically assesses the relationship between financial inclusion and economic growth in Sub‐Saharan African (SSA) countries for the period of 2004–2017, using the generalized method of moments and Dumitrescu–Hurlin's causality test. Based on the multidimensionality of the financial inclusion measures, a principal component analysis was applied to develop a composite index for financial inclusion. The results show that financial inclusion has a significant positive influence on economic growth in SSA countries. Other findings indicate that there is causality running from economic growth to financial inclusion in the short run. Therefore, policymakers should emphasize strategies that foster access to quality and affordable financial services and products, to improve inclusive growth in the continent.

Date: 2023
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