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

Author

Listed:
  • Vera Fiador
  • Sarah Anobil Okyere

    (University of Ghana Business School, Ghana)

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.

Suggested Citation

  • Vera Fiador & Sarah Anobil Okyere, 2024. "Foreign Bank Participation and Financial Inclusion in Emerging Economies - Evidence from Sub-Saharan Africa," The African Finance Journal, Africagrowth Institute, vol. 26(1), pages 65-77.
    • Handle: RePEc:afj:journl:v:26:y:2024:i:1:p:65-77
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    File URL: https://journals.co.za/doi/abs/10.10520/ejc-finj_v26_n1_a4
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    More about this item

    Keywords

    Financial inclusion; Foreign bank participation; Sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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