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Social and institutional determinants of digital financial inclusion in Africa: A system GMM Approach

Olaniyi Evans

MPRA Paper from University Library of Munich, Germany

Abstract: African nations have shown remarkable promise in digital financial services in recent years. However, much more remains to be done. Given this background, this study empirically investigates the social and institutional determinants of digital financial inclusion for a panel of 42 African countries using system GMM for the period 1995-2018. The empirical results show that social factors such as literacy, infrastructure, unemployment rate and standard of living have significant influence on digital financial inclusion. These results suggest that social realities matter for digital financial services. Equally, institutional factors such as political stability and absence of violence, control of corruption, regulatory quality, government effectiveness and rule of law have statistically significant and positive effects. These results suggest that better governance and better institutions correlate with faster digital financial inclusion. The estimates are robust to changes in estimation methods.

Keywords: digital financial services; social and institutional determinants (search for similar items in EconPapers)
JEL-codes: O3 O33 O35 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-afr, nep-des, nep-fdg, nep-fle, nep-inv, nep-mfd and nep-pay
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Published in Actual Problems in Economics 247 (2022): pp. 49-62

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