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Financial inclusion and inclusive growth in sub-Saharan Africa

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  • Bernard Sarpong
  • Edward Nketiah-Amponsah

Abstract

This paper empirically examines the quantitative relationship between financial inclusion and inclusive growth in sub-Saharan Africa using a panel of 46 countries for the period 2004–2018. The evidence suggests that usage of financial services, among other covariates, has a quantifiable and discernible impact on inclusive growth compared with availability and knowledge of financial services. Precisely, a unit increase in the usage of financial products and services improves inclusive growth by 0.03 units in sub-Saharan Africa. The paper contributes to literature by initially constructing a broader index of inclusive growth and subsequently estimating the separate quantitative effects of three categories of financial inclusion indicators on inclusive growth by employing the Arellano–Bover/Blundell–Bond system Generalized Method of Moment estimator. The findings underscore the need for policymakers to develop innovative, sustainable and inclusive financial systems capable of distributing growth benefits equitably. This can be achieved through moderate lending rates and transaction charges, improved access to retail and corporate loans, mortgages, overdrafts, credit cards, letters of credits and user-friendly financial technologies.

Suggested Citation

  • Bernard Sarpong & Edward Nketiah-Amponsah, 2022. "Financial inclusion and inclusive growth in sub-Saharan Africa," Cogent Economics & Finance, Taylor & Francis Journals, vol. 10(1), pages 2058734-205, December.
    • Handle: RePEc:taf:oaefxx:v:10:y:2022:i:1:p:2058734
    DOI: 10.1080/23322039.2022.2058734
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    Cited by:

    1. Chen, Jingquan & Ma, Wanying & Kchouri, Bilal & Ribeiro-Navarrete, Samuel, 2024. "Resource rich yet debt ridden: The role of natural resources and debt servicing in sustainable economic growth," Resources Policy, Elsevier, vol. 89(C).
    2. Abdul Karim Kamara, 2024. "The Impact of Financial Inclusion on Economic Growth and Poverty Reduction: Empirical Evidence from sub-Saharan Africa," International Journal of Science and Business, IJSAB International, vol. 32(1), pages 16-33.
    3. Kumar, Sumit & Pradhan, Kalandi Charan, 2024. "Socioeconomic and demographic determinants of financial inclusion in South Asia: Integrated policy for targeted groups of population," Journal of Policy Modeling, Elsevier, vol. 46(3), pages 655-682.
    4. Ndivhuho Eunice Ratombo & Itumeleng Pleasure Mongale, 2024. "Establishing the Effects of Internet Users on Inclusive Growth for the SADC Members States: Panel ARDL Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 14(4), pages 316-329, July.
    5. Abdul Karim Kamara & Baorong Yu, 2024. "The Impact of FinTech Adoption on Traditional Financial Inclusion in Sub-Saharan Africa," Risks, MDPI, vol. 12(7), pages 1-19, July.
    6. Damane, Moeti & Ho, Sin-Yu, 2024. "Effects of financial inclusion on financial stability: evidence from ssa countries," MPRA Paper 120238, University Library of Munich, Germany.
    7. Mmbaga, Nanzia F. & Kulindwa, Yusuph & Kazungu, Isaac, 2023. "Energy Consumption and Economic Growth Nexus in East African Sub-Region: Interactive Dynamics of Human Capital," African Journal of Economic Review, African Journal of Economic Review, vol. 11(5), December.

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