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The Role of Institutional Infrastructures in Financial Inclusion-Growth Relations: Evidence from SSA

Author

Listed:
  • Kazeem B. Ajide

    (University of Lagos, Nigeria)

  • Ibrahim D. Raheem

    (EXCAS, Liège, Belgium)

  • Olorunfemi Y. Alimi

    (University of Lagos, Nigeria)

  • Simplice A. Asongu

    (Yaoundé, Cameroon)

Abstract

This paper investigates the role of institutional infrastructures in the financial inclusion-growth nexus for a panel of twenty countries in sub-Sahara Africa (SSA).Employing the System Generalized Method of Moments (GMM), the following insightful outcomes are established. First, while there is an unrestricted positive impact of physical access to ATMs and ICT measures of financial inclusion on SSA’s growth but only the former was found significant. Second, the four institutional components via economic, political, institutional and general governances were also found to be growth-spurring. Lastly, countries with low levels of real per capita income are matching up with other countries with high levels of real income per capita. The empirical evidence of some negative net effects and insignificant marginal impacts are indication that imperfections in the financial markets are sometimes employed to the disadvantage of the poor. On the whole, we established positive effects on growth for the most part. The positive effects are evident because the governance indicators compliment financial inclusion in reducing pecuniary constraints hindering credit access and allocation to the poor that deteriorate growth.

Suggested Citation

  • Kazeem B. Ajide & Ibrahim D. Raheem & Olorunfemi Y. Alimi & Simplice A. Asongu, 2020. "The Role of Institutional Infrastructures in Financial Inclusion-Growth Relations: Evidence from SSA," Working Papers 20/043, European Xtramile Centre of African Studies (EXCAS).
    • Handle: RePEc:exs:wpaper:20/043
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    Cited by:

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    4. Jimoh Sina Ogede & Musa Olanrewaju Oduola & Olumuyiwa Ganiyu Yinusa & Lukman Raimi, 2023. "Modelling The Influence Of Financial Inclusion On The Remittancegrowth Nexus In Nigeria," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 68(237), pages 137-163, April – J.
    5. Simplice A. Asongu & Mushfiqur Rahman & Richard Adu‐Gyamfi & Raufhon Salahodjaev, 2024. "Tourism management synergies in Sub‐Saharan Africa," World Affairs, John Wiley & Sons, vol. 187(1), pages 63-77, March.
    6. Ozili, Peterson K, 2023. "Institutional theory of financial inclusion," MPRA Paper 115770, University Library of Munich, Germany.
    7. Yixuan Wang & Ridwan Lanre Ibrahim & David Mautin Oke & Mamdouh Abdulaziz Saleh Al‐Faryan, 2024. "Investigating green energy–environment nexus in post‐COP26 era: Can technological innovation, financial development and government expenditure deliver Africa's targets?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(3), pages 3263-3285, July.
    8. Pradhan, Rudra P. & Arvin, Mak B. & Nair, Mahendhiran S. & Hall, John H. & Bennett, Sara E., 2021. "Sustainable economic development in India: The dynamics between financial inclusion, ICT development, and economic growth," Technological Forecasting and Social Change, Elsevier, vol. 169(C).

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    More about this item

    Keywords

    Financial Inclusion; Economic Growth; Governance; System Generalized Method of Moments (GMM);
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • I10 - Health, Education, and Welfare - - Health - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • P37 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Legal

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