The Role of Financial Inclusion on Economic Growth in Sub Saharan African (SSA) Region

Abstract

Recently, financial inclusion through improved access within SSA region has increased and at a faster rate compared to other regions. By estimating panel data on 45 countries between 2004 and 2017, using Generalized Method of Moments (GMM) method, this study examined whether financial inclusion through improved access contributed positively on economic growth. The study examines both linear and non-linear effects of financial inclusion using three different indicators including financial inclusion index. The results reveal that, financial inclusion promotes economic growth. Our results are robust irrespective of upper middle income within SSA region. The need to design policies that widen accessibility and sustain financial inclusion is rather important, as it improves economic growth, development and reduces poverty within SSA region. Keywords: SSA region, financial inclusion, GMM, nonlinear and economic growth