Reexamining the effects of Financial Inclusion on Human Development in Sub-Saharan Africa

Djekonbe Djimoudjiel (), Mahamat Ibrahim Ahmat Tidjani () and Bobbo Oumarou ()
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Mahamat Ibrahim Ahmat Tidjani: Faculty of Economics and Management, Felix Houphouët Boigny University, Ivory Coast
Bobbo Oumarou: Faculty of Economics and Management, University of Dschang, Cameroon

Economic Research Guardian, 2022, vol. 12, issue 1, 55-71

Abstract: Unlike the bulk of empirical studies that focused on the effect of financial development, our study investigates rather the impact of direct access and use of formal financial services on human development in sub-Saharan Africa. The paper draws a sample of 28 sub-Saharan African countries from different sources (WDI, GFDD, WGI and UNDP databases) for the period 2004-2017 for the analysis. It adopts a two-stage fixed effect instrumental variables and a system GMM estimations to extract the exogenous effect of financial inclusion on human development. The findings of the baseline model suggest that greater financial inclusion through improved access and usage of formal financial services affects positively and significantly human development in sub-Saharan Africa. The findings are robust to the use of an alternative method of estimation (dynamic panel estimation) and a control for outliers (a different sample). The study suggests that sub-Saharan African countries can leverage financial inclusion to improve human development in the region. Therefore, policymakers and commercial banks should promote access and use of financial services in sub-Saharan Africa.

Keywords: Financial Inclusion; Human Development; SSA; GMM (search for similar items in EconPapers)
JEL-codes: C23 G21 N17 O15 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:wei:journl:v:12:y:2022:i:1:p:55-71

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