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Financial Inclusion, Income Inequality and Sustainable Economic Growth in Sub-Saharan African Countries

Author

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  • Chima M. Menyelim

    (Department of Banking and Finance, College of Management and Social Sciences, Covenant University, Ota PMB 1023, Ogun State, Nigeria)

  • Abiola A. Babajide

    (Department of Banking and Finance, College of Management and Social Sciences, Covenant University, Ota PMB 1023, Ogun State, Nigeria)

  • Alexander E. Omankhanlen

    (Department of Banking and Finance, College of Management and Social Sciences, Covenant University, Ota PMB 1023, Ogun State, Nigeria)

  • Benjamin I. Ehikioya

    (Department of Banking and Finance, College of Management and Social Sciences, Covenant University, Ota PMB 1023, Ogun State, Nigeria)

Abstract

This study evaluates the relevance of inclusive financial access in moderating the effect of income inequality on economic growth in 48 countries in Sub-Saharan Africa (SSA) for the period 1995 to 2017. The findings using the Generalised Method of Moments (sys-GMM) technique show that inclusive financial access contributes to reducing inequality in the short run, contrary to the Kuznets curve. The result reveals a negative effect of financial access on the relationship between income inequality and economic growth. There is a positive net effect of inclusive financial access in moderating the impact of income inequality on economic growth. Given the need to achieve the Sustainable Development Targets in the sub-region, policymakers and other stakeholders of the economy must design policies and programmes that would enhance access to financial services as an essential mechanism to reduce income disparity and enhance sustainable economic growth.

Suggested Citation

  • Chima M. Menyelim & Abiola A. Babajide & Alexander E. Omankhanlen & Benjamin I. Ehikioya, 2021. "Financial Inclusion, Income Inequality and Sustainable Economic Growth in Sub-Saharan African Countries," Sustainability, MDPI, vol. 13(4), pages 1-15, February.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:4:p:1780-:d:494941
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    6. Samuel Orekoya & Oluwatoyin Akintunde, 2023. "Financial Inclusion as a Panacea for Income Inequality in Nigeria," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 15(2), pages 169-180, December.
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