GROWTH OF FINANCIAL DEVELOPMENT IN SUB SAHARAN AFRICAN (SSA) REGION THROUGH MIGRANT REMITTANCES

Abstract

This Paper investigates the impact of remittances on the financial development of countries in the sub-Saharan Africa using panel data analysis from 1985 to 2013. Several Literature has been written on the impact of remittance on growth and on poverty in sub-Saharan Africa however few have critically analysed the impact of remittances on financial development in the region. Using two definitions of financial development, the ratio of money supply to GDP (M2/GDP), and the ratio of domestic credit to GDP (DC/GDP), this paper finds that remittances have a positive effect of financial development. However, the size of the effect depends on definition of financial development that is used in the analysis.