Foreign Bank Participation and Financial Inclusion in Emerging Economies - Evidence from Sub-Saharan Africa

Vera Fiador and Sarah Anobil Okyere ()
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Sarah Anobil Okyere: University of Ghana Business School, Ghana

The African Finance Journal, 2024, vol. 26, issue 1, 65-77

Abstract: Purpose - This paper investigates the financial inclusion effects of global financial integration, via foreign bank participation, on host economies in Sub-Saharan Africa. Methodology - The paper employs panel data on 24 sub-Saharan African countries over the past 23 years, from 1995 to 2017, and utilizes the fixed effects, generalized methods of moments (GMM) and Prais-Winsten estimation techniques in the analysis. Findings - The results reveal that an increase in foreign bank participation leads to a an overall increase in financial inclusion in sub-Saharan Africa with regards to outreach/access, availability and usage of financial services. Other variables such as urbanization, GDP per capital and quality of legal environment also appear to play significant roles. Originality - In general, this study confirms the conventionally asserted positive influences of global financial integration and holds policy implications for financial inclusion approaches in the Sub-Saharan African region.

Keywords: Financial inclusion; Foreign bank participation; Sub-Saharan Africa (search for similar items in EconPapers)
JEL-codes: F65 G21 O16 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:afj:journl:v:26:y:2024:i:1:p:65-77

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