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Reexamining the effects of Financial Inclusion on Human Development in Sub-Saharan Africa

Author

Listed:
  • Djimoudjiel Djekonbe

    (University of N’Djamena - LAREAGE, Center of Research in Economic and Inclusive Development (CREDI), Chad)

  • Mahamat Ibrahim Ahmat Tidjani

    (Faculty of Economics and Management, Felix Houphouët Boigny University, Ivory Coast)

  • Bobbo Oumarou

    (Faculty of Economics and Management, University of Dschang, Cameroon)

Abstract

Unlike the bulk of empirical studies that focused on the effect of financial development, our study investigates rather the impact of direct access and use of formal financial services on human development in sub-Saharan Africa. The paper draws a sample of 28 sub-Saharan African countries from different sources (WDI, GFDD, WGI and UNDP databases) for the period 2004-2017 for the analysis. It adopts a two-stage fixed effect instrumental variables and a system GMM estimations to extract the exogenous effect of financial inclusion on human development. The findings of the baseline model suggest that greater financial inclusion through improved access and usage of formal financial services affects positively and significantly human development in sub-Saharan Africa. The findings are robust to the use of an alternative method of estimation (dynamic panel estimation) and a control for outliers (a different sample). The study suggests that sub-Saharan African countries can leverage financial inclusion to improve human development in the region. Therefore, policymakers and commercial banks should promote access and use of financial services in sub-Saharan Africa.

Suggested Citation

  • Djimoudjiel Djekonbe & Mahamat Ibrahim Ahmat Tidjani & Bobbo Oumarou, 2022. "Reexamining the effects of Financial Inclusion on Human Development in Sub-Saharan Africa," Economic Research Guardian, Mutascu Publishing, vol. 12(1), pages 55-71, June.
    • Handle: RePEc:wei:journl:v:12:y:2022:i:1:p:55-71
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    References listed on IDEAS

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    Cited by:

    1. Kais Tissaoui & Abdelaziz Hakimi & Taha Zaghdoudi, 2024. "Can financial inclusion enhance human development? Evidence from low- and middle-income countries," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-14, December.

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    More about this item

    Keywords

    Financial Inclusion; Human Development; SSA; GMM;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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