Eleven of those 16 countries now have new or expanded world bank group financial access inclusion projects. New data from the global financial inclusion global findex database show that 24 percent of adults in sub saharan africa have an account at a formal financial institution, and 16 percent use a mobile phone to pay bills or send or receive money. Designations employed in this publication do not imply the expression of any opinion, on. We use detailed individuallevel survey data, combined with key countrylevel indicators of bank competition and financial soundness, to study the effect on the adoption of several financial products bank accounts, credit and debit cards, and bank loans. The main focus of financial inclusion in india is to promote sustainable development and generating employment in. Subsaharan africa series summarize data compiled by global findex from nationally representative surveys of more than 150,000 adults in over 140 economies in 2017, including more than 35,000 adults in. Financial regulation and financial inclusion in sub. Digital financial inclusion in subsaharan africa european. Financial inclusion indicators for rural and urban population in africa. The global findex database is the worlds most comprehensive set of data on how people make payments, save money, borrow and manage risk. Financial inclusion in sub saharan africa new data from the global financial inclusion global findex database show that 24 percent of adults in sub saharan africa have an account at a formal financial institution, and 16 percent use a mobile phone to pay bills or send or receive money. Financial development in subsaharan africa promoting inclusive and sustainable growth prepared by a team led by montfort mlachila and composed of larry cui, ahmat jidoud, monique newiak, bozena radzewiczbak, misa takebe, yanmin ye, and jiayi zhang author author author author.
Identification, financial inclusion and development in subsaharan africa the findex notes. Without addressing these constraints, those 700 million accounts are a vanity statistic for the. July 2012 findex the global findex database notes financial. In this paper we study how competition and financial soundness affect financial inclusion in sub saharan africa ssa. This paper examines barriers to financial inclusion across subsahara africa ssa u sing the 2014 global findex dataset from the demandside perspective. Determinants of financial inclusion in subsaharan africa countries. Maria soledad martinez peria is a research manager in the development research. The purpose of this paper is to investigate the dynamic link between financial inclusion and financial sector development fsd in subsaharan africa. Gemechu ayana aga is a private sector development analyst in the enterprise analysis unit of the world bank. A conceptual framework for financial inclusion and recent. New data from the global financial inclusion global findex database show that 24 percent of adults in subsaharan africa have an account at a formal financial institution, and 16 percent use a mobile phone to pay bills or send or receive money. Secondly, the study disaggregates the relationship. Stylized facts of remittances and financial inclusion in subsaharan africa following ratha, eigenzucchi, and plaza 2016, as shown in figure one, remittance flows to ssa africa have declined. Kennedy komba during the roundtable, digital financial inclusion in subsaharan africa, in berlin earlier this year.
An examination of the impact of financial inclusion on. This chapter uses consumer choice theory to develop a conceptual framework to help identify constraints to financial inclusion, and presents recent empirical evidence from the finscope surveys to comparatively assess financial inclusion in subsaharan africa. More than 30 percent of adults had a bank account in 2014, up from 24 percent in 2011. In this paper we study how competition and financial soundness affect financial inclusion in. Financial inclusion in subsaharan africa mobile money is powering financial inclusion in subsaharan africa. This policy brief presents findings of a human sciences research council hsrc survey that studied the impact of fintech for financial inclusion in subsaharan africa. Pdf african journal of economic and management studies what. Banking in subsaharan africa european investment bank. An investigation into the level of financial inclusion in. Mobile drives financial inclusion in africa, growing 20%. Research ict africa cprsouth 2018, maputomozambique. Mobile money and digital financial inclusion the findex notes. The emanated findings consistently stress the importance of institutions together with other control variables like gdp per capita, inflation, bank.
Despite the importance of financial inclusion, especially for economic growth of developing regions such as sub saharan africa, the prevailing level financial inclusion remain an open question. Review of fintech strategies for financial inclusion in sub saharan africa krish chetty, jaya josie, babalwa siswana, ephafarus mashotola human sciences research council, brics research centre kim kariuki busara center for behaviourial economics chernay johnson, david saunders, herman smit centre for financial regulation and inclusion. With 350 million adults excluded from the formal financial ecosystem, subsaharan africa is working to provide better access to financial services. Download the little data book on financial inclusion. International remittances and financial inclusion in subsaharan africa. Pdf determinants of financial inclusion in subsaharan.
Financial stability was introduced in the study as a moderating variable between financial regulation and financial inclusion. The effect of financial inclusion on welfare in subsaharan africa. Financial inclusion is crucial for redistribution of economic resources between the deficit and surplus units in an economy. Financial inclusion in africa world bank documents. Recent trends and digital financial inclusion about the report at its third edition, this report provides an analysis of recent development in the ssa banking sector. Chikalipah 2017 investigate the determinants of financial inclusion in sub saharan africa for the year 2014, and find that illiteracy is the major hindrance to financial inclusion in sub saharan.
Eleven of those 16 countries now have new or expanded world bank groupfinancial accessinclusion projects. Ajide1 the paper examines the determinants of financial inclusion by specially accounting for the role of institutions in a panel of eighteen 18 subsaharan africa ssa countries using a dynamic system of generalized. Digital financial inclusion in subsaharan africa central banks are mandated to promote and protect financial stability, but they need to balance this mandate with the need to foster financial inclusion, said afi head of strategy and member relations, mr. Womens economic empowerment through financial inclusion. Bcg recently carried out research into the state of financial inclusion in the country, which revealed some of the key reasons why south africans are not. This publication on financial inclusion in africa is produced by the staff of the african development bank, and the views expressed therein do not necessarily re. The nonbank segments of africas financial systems show an even lower degree of development than banking. Role of institutional quality in promoting financial inclusion. Sector distribution of bank credit in africa 2009 86 figure vi. Delivering on financial inclusion, supporting financial stability about the report at its fourth edition, this report provides an analysis of recent development in the banking african. Financial development in sub saharan africa promoting inclusive and sustainable growth prepared by a team led by montfort mlachila and composed of larry cui, ahmat jidoud, monique newiak, bozena radzewiczbak, misa takebe, yanmin ye, and jiayi zhang author author author author. Diverse use cases, enabling environment boost adoption. This research aims to extend the existing literature on financial inclusion by using a.
Since demand outstripped the original target, a total of 16 ida countries, nine of which are in sub saharan africa, were identified for bank group support to help meet national financial access and inclusion commitments. While financial inclusion the adoption, usage and sustainability of financial services is generally linked to socioeconomic development, it faces numerous challenges in south africa. Human rights abuses in the name of financial inclusion. Inclusion in subsaharan africa, collects much of the experience. Financial inclusion in sub saharan africa mobile money is powering financial inclusion in sub saharan africa. Since demand outstripped the original target, a total of 16 ida countries, nine of which are in subsaharan africa, were identified for bank group support to help meet national financial access and inclusion commitments.
Sep, 2016 with 350 million adults excluded from the formal financial ecosystem, sub saharan africa is working to provide better access to financial services. Broadening financial inclusion in subsaharan africa. International remittances and financial inclusion in sub. This includes the 12 percent of adults who have a mobile money account. This chapter uses consumer choice theory to develop a conceptual framework to help identify constraints to financial inclusion, and presents recent empirical evidence from the finscope surveys to comparatively assess financial inclusion in sub saharan africa. In sub saharan africa, financial inclusion has increased rapidly in recent years due mainly to the development of digital financial services and innovative business models such as agent banking. Subsaharan africa is the only region in the world where close to 10 percent of gdp in transactions occur through mobile money. Pdf barriers of financial inclusion in subsaharan africa.
Pdf what determines financial inclusion in subsaharan. Ajide1 the paper examines the determinants of financial inclusion by specially accounting for the role of institutions in a panel of eighteen 18 sub saharan africa ssa countries using a dynamic system of generalized. The effect of financial inclusion on welfare in sub. That is the equivalent of the adult population of a small country. Evidence on the role of creditor rights protection and information sharing. This is illustrated through a basic measure of financial inclusion. Gemechu ayana aga and maria soledad martinez peria. Account penetration in african fragile states % 97. In general, according to the recently published world bank findex survey, financial inclusion in subsaharan africa has increased dramatically from 23% in 2011 to 43% in 2017.
Financial inclusion design in subsaharan africa when the world bank launched a focus on financial inclusion in 2011, about 2. Increased banking coverage must happen simultaneously with the necessary, domestic macroprudential policies that protect against the greater risks of transmitting financial shocks. The study goes beyond analysing descriptive statistics to identifying the bottlenecks in financial sector and their effect on the poor. Chikalipah 2017 investigate the determinants of financial inclusion in subsaharan africa for the year 2014, and find that illiteracy is the major hindrance to financial inclusion in subsaharan.
Pdf what determines financial inclusion in subsaharan africa. The analysis shows that the interaction of financial stability and financial regulation has a positive effect on financial inclusion in subsaharan africa. Financial inclusion in subsaharan africa new data from the global financial inclusion global findex database show that 24 percent of adults in subsaharan africa have an account at a formal financial institution, and 16 percent use a mobile phone to pay bills or send or receive money. Financial inclusion and bank competition in subsaharan africa. Review of fintech strategies for financial inclusion in subsaharan africa krish chetty, jaya josie, babalwa siswana, ephafarus mashotola human sciences research council, brics research centre kim kariuki busara center for behaviourial economics chernay johnson, david saunders, herman smit centre for financial regulation and inclusion. I n t e r n a t i o n a l m o n e t a r y f u n d african department financial development in subsaharan africa promoting inclusive and sustainable growth. Subsaharan africa series summarizes data compiled by the global findex from nationally representative surveys of more than 150,000 adults in over 140 economies in 2017, including more than 35,000 adults in 35 economies in subsaharan africa. An empirical investigation of remittances and financial. In subsaharan africa, financial inclusion has increased rapidly in recent years due mainly to the development of digital financial services and innovative business models such as agent banking. Determinants of financial inclusion in sub saharan africa countries. Review of fintech strategies for financial inclusion in.
Mobile money and financial inclusion in subsaharan countries. Financial technology, subsaharan africa, case study. Assessing financial inclusion advances in subsaharan africa. May 16, 2018 in general, according to the recently published world bank findex survey, financial inclusion in subsaharan africa has increased dramatically from 23% in 2011 to 43% in 2017. Pdf african journal of economic and management studies. Broadening financial inclusion in subsaharan africa overseas. The number of new users brought into the formal financial system is expected to grow beyond the close. Mobile money accounts now surpass bank accounts in the region and greater financial inclusion has benefited large swathes of the population that remain unbanked including the poor, the young, and women. Despite the importance of financial inclusion, especially for economic growth of developing regions such as subsaharan africa, the prevailing level financial inclusion remain an open question. Review of fintech strategies for financial inclusion in sub. Financial inclusion in africa african development bank. Findex the global findex database 2014 notes financial. Globally, only 58 percent of women hold an account in a formal financial institution, compared to 65 percent of men demirguckunt et.
It is my pleasure to be here today, to speak to such a distinguished group about financial. Challenge financial inclusion statistics at present tend to exclude the key factor of usage, referring instead predominantly to consumers access to financial products. Mobile money and financial inclusion in subsaharan countries mothobi, o. Financial inclusion design in subsaharan africa blog. The center for financial inclusion cfi is an independent think tank housed at accion that works to better serve, protect and empower clients. However, much remains to be done and the pace of digital financial inclusion has varied in different african countries. Sub saharan africa series summarize data compiled by global findex from nationally representative surveys of more than 150,000 adults in over 140 economies in 2017, including more than 35,000 adults in 35 economies in sub saharan africa. Financial technology, sub saharan africa, case study. Financial inclusion design in subsaharan africa blog 11. Pdf purpose the purpose of this paper is to investigate the determinants of financial inclusion fi in subsaharan africa. An underbanked but financially active population the immensity of subsaharan africa 24 million km.
Economic research southern africa ersa is a research programme funded by the national treasury of south africa. An investigation into the level of financial inclusion in sub. Mobile drives financial inclusion in africa, growing 20% in. Pdf this paper summarizes financial inclusion across africa. After a decade of strong growth, mediumterm economic prospects are still bright. Financial inclusion and financial sector development in. Stylized facts of remittances and financial inclusion in sub saharan africa following ratha, eigenzucchi, and plaza 2016, as shown in figure one, remittance flows to ssa africa have declined. This study examine the impact of financial inclusion on poverty reduction in forty nine subsaharan african countries using data spanning the. The views expressed are those of the authors and do not necessarily represent those of the funder, ersa or the authors affiliated institutions. The little data book on financial inclusion 2018 iii contents. Financial inclusion is delivery of banking services at an affordable cost to the vast sections of disadvantaged and low income groups. This paper examines barriers to financial inclusion across sub sahara africa ssa u sing the 2014 global findex dataset from the demandside perspective.
Subsaharan africa has been regarded the home of poverty, housing a large number of poorly, malnourish leading to varied social vises. Subsaharan africa alliance for financial inclusion. Launched in 2011, it includes more than 100 financial inclusion indicators in a format allowing users to compare access to financial services among adults worldwide including by gender, age and household income. The paper examines the determinants of financial inclusion by specially accounting for the role of institutions in a panel of eighteen 18 subsaharan africa ssa countries using a dynamic system of generalized method of moments sysgmm.
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