Determinants of Financial Inclusion: A Comparative Study of Kenya and Ethiopia

Wuddasie Dereje Bekele

Journal of African Business, 2023, vol. 24, issue 2, 301-319

Abstract: This study conducts a comparative analysis of the factors affecting financial inclusion in Kenya and Ethiopia at macro and micro levels. A generalized linear model is used to examine the determinants of and barriers to financial inclusion using the 2017 Global Findex Database, whereas a descriptive analysis is used to explore their macro-level differences. Kenya has a higher level of financial inclusion than Ethiopia. Differences in financial liberalization policy, gross domestic product, percentage of rural population, and mobile money service expansion are some macro-level differences that explain this variation. Differences in literacy rates and means of receiving payments such as government transfers explain some of the micro-level variations between the two countries. In addition, gender, age, employment status, and owning a mobile phone have significant and positive effects on financial inclusion. However, lack of documentation, lack of trust, and lack of money are significant barriers to financial inclusion.

Date: 2023
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DOI: 10.1080/15228916.2022.2078938

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