Remittances, Financial Inclusion and Income Inequality in Africa

Yannick Bkwayep Nguemnang and NANFOSSO Roger Tsafack

MPRA Paper from University Library of Munich, Germany

Abstract: This paper extends the existing literature on financial inclusion by analyzing the role of financial inclusion (FI) within remittances on income inequality (Gini, Atkinson and Palma-Ratio). It examines whether FI amplifies the reduction in income inequality in a panel of 47 countries over the period 2004-2014. The empirical evidence is based on Generalised Method Moments. We used Five financial inclusion indicators (ATMs for 100,000 adults; banking branches for 100,000 adults; credits: deposits and insurance), remittances and three income inequality variables (Gini index; Atkinson and Palma ratio) as part of this study. The results show that migrant remittances and FI reduce income inequality. The results further indicate that FI implifies the impact of the migrant remittances on income inequality, revealing a complementarity between remittances and FI to reduce income inequality. The complementary action of financial inclusion on migrants' remittances offers wider access to financial services which also leads to an increase in remittances and therefore reduces inequalities.

Keywords: Inequality; Remittances; Financial Inclusion; Africa (search for similar items in EconPapers)
JEL-codes: G21 G24 O11 O19 (search for similar items in EconPapers)
Date: 2020-04-16, Revised 2020-04-22
New Economics Papers: this item is included in nep-fle
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Citations: View citations in EconPapers (1)

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