Financial exclusion of bankable adults: implication on financial inclusive growth among twenty-seven SSA countries

Financial exclusion of bankable adults: implication on financial inclusive growth among twenty-seven SSA countries

Author by Dr. Abolade Akintola

Journal/Publisher: Cogent Social Sciences

Volume/Edition: 6

Language: English

Pages: 1 - 15

Abstract

The G20 made a commitment to adopt financial inclusion as a major
support towards the achievement of its 2030 Agenda for Sustainable Development
of all member countries. Specifically, the sustainable development goals of
employment creation, hunger elimination and poverty reduction would be
addressed when those in the informal sector are captured into mainstream finance.
This study investigated how financial exclusion impairs inclusive drive of 27 sub
Saharan African countries using secondary data sourced from World Bank database
for 10 years (2007–2017). Granger Error Correction Method (ECM) with General
Methods of Moments (GMM) of Arellanon and Bond (1991) were used to analyse the
short panel data obtained from the World Bank database. The ECM test result found
evidence of a long-run relationship, however, in the short-run, there is an insignificant
but positive relationship between financial inclusion and exclusion with values
recorded at 0.33, 0.37 and 0.32 for low, moderate and high financial stable countries,
respectively. This implies that, there is no correlation between financial inclusion and financial exclusion (proxy by unemployment) in the three sets of
countries sampled. However, for the moderately stable financial system, exclusion
has negative long run multiplier impact on inclusion. The study therefore recommends
policies that could sustain and improve employment rate in poorly and
highly stable financial system.


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