The study goes beyond analysing descriptive statistics to identifying the bottlenecks in financial sector and their effect on the poor. Inclusion in subsaharan africa, collects much of the experience. This includes the 12 percent of adults who have a mobile money account. 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. 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. Maria soledad martinez peria is a research manager in the development research. Determinants of financial inclusion in subsaharan africa countries. Broadening financial inclusion in subsaharan africa overseas. Subsaharan africa has been regarded the home of poverty, housing a large number of poorly, malnourish leading to varied social vises.
Financial inclusion design in subsaharan africa blog. This is illustrated through a basic measure of financial inclusion. While financial inclusion the adoption, usage and sustainability of financial services is generally linked to socioeconomic development, it faces numerous challenges in south 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.
Evidence on the role of creditor rights protection and information sharing. That is the equivalent of the adult population of a small country. Broadening financial inclusion in subsaharan africa. International remittances and financial inclusion in subsaharan africa. 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. Economic research southern africa ersa is a research programme funded by the national treasury of south africa. 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.
Financial inclusion in subsaharan africa mobile money is powering 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. However, much remains to be done and the pace of digital financial inclusion has varied in different african countries. This paper examines barriers to financial inclusion across subsahara africa ssa u sing the 2014 global findex dataset from the demandside perspective. 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. Financial inclusion is delivery of banking services at an affordable cost to the vast sections of disadvantaged and low income groups.
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. 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. Financial inclusion indicators for rural and urban population in africa. 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. 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. An investigation into the level of financial inclusion in sub. In this paper we study how competition and financial soundness affect financial inclusion in. The main focus of financial inclusion in india is to promote sustainable development and generating employment in.
Financial inclusion in sub saharan africa mobile money is powering financial inclusion in sub saharan africa. Mobile drives financial inclusion in africa, growing 20%. Gemechu ayana aga is a private sector development analyst in the enterprise analysis unit of the world bank. 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. Pdf determinants of financial inclusion in subsaharan. Secondly, the study disaggregates the relationship. Download the little data book on financial inclusion. 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. 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. Role of institutional quality in promoting financial inclusion. Pdf african journal of economic and management studies.
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. An investigation into the level of financial inclusion in. Mobile money and financial inclusion in subsaharan countries mothobi, o. 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.
Research ict africa cprsouth 2018, maputomozambique. 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. An empirical investigation of remittances and financial. It is my pleasure to be here today, to speak to such a distinguished group about financial. 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 technology, subsaharan africa, case study. 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. In this paper we study how competition and financial soundness affect financial inclusion in sub saharan africa ssa. 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. Banking in subsaharan africa european investment bank. The center for financial inclusion cfi is an independent think tank housed at accion that works to better serve, protect and empower clients. This paper examines barriers to financial inclusion across sub sahara africa ssa u sing the 2014 global findex dataset from the demandside perspective. 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. Human rights abuses in the name of financial inclusion.
Pdf what determines financial inclusion in subsaharan africa. Sector distribution of bank credit in africa 2009 86 figure vi. 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. 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. Financial inclusion and bank competition in subsaharan africa. Pdf what determines financial inclusion in subsaharan. Womens economic empowerment through financial inclusion. Financial inclusion in africa world bank documents. Financial inclusion design in subsaharan africa when the world bank launched a focus on financial inclusion in 2011, about 2. Account penetration in african fragile states % 97. 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. 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.
Pdf purpose the purpose of this paper is to investigate the determinants of financial inclusion fi in subsaharan africa. With 350 million adults excluded from the formal financial ecosystem, subsaharan africa is working to provide better access to financial services. An underbanked but financially active population the immensity of subsaharan africa 24 million km. The little data book on financial inclusion 2018 iii contents. 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. 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. The nonbank segments of africas financial systems show an even lower degree of development than banking. Without addressing these constraints, those 700 million accounts are a vanity statistic for the. The global findex database is the worlds most comprehensive set of data on how people make payments, save money, borrow and manage risk.
Determinants of financial inclusion in sub saharan africa countries. Financial inclusion is crucial for redistribution of economic resources between the deficit and surplus units in an economy. Review of fintech strategies for financial inclusion in. The purpose of this paper is to investigate the dynamic link between financial inclusion and financial sector development fsd in subsaharan africa. Increased banking coverage must happen simultaneously with the necessary, domestic macroprudential policies that protect against the greater risks of transmitting financial shocks. Oct 07, 2016 financial inclusion in subsaharan africa. Pdf african journal of economic and management studies what. A conceptual framework for financial inclusion and recent. Findex the global findex database 2014 notes financial. 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. Financial inclusion indicators for rural and urban population in africa 85 figure v. Gemechu ayana aga and maria soledad martinez peria.
Challenge financial inclusion statistics at present tend to exclude the key factor of usage, referring instead predominantly to consumers access to financial products. International remittances and financial inclusion in sub. 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 european. Diverse use cases, enabling environment boost adoption. Subsaharan africa is the only region in the world where close to 10 percent of gdp in transactions occur through mobile money. Mobile money and financial inclusion in subsaharan countries. The number of new users brought into the formal financial system is expected to grow beyond the close.
The analysis shows that the interaction of financial stability and financial regulation has a positive effect on financial inclusion in subsaharan africa. The effect of financial inclusion on welfare in sub. Financial inclusion and financial sector development in. Subsaharan africa alliance for financial inclusion. Mobile money and digital financial inclusion the findex notes. Financial inclusion in africa african development bank. Assessing financial inclusion advances in subsaharan africa.
Sep, 2016 with 350 million adults excluded from the formal financial ecosystem, sub saharan africa is working to provide better access to financial services. More than 30 percent of adults had a bank account in 2014, up from 24 percent in 2011. 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. Pdf barriers of financial inclusion in subsaharan africa. 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. The effect of financial inclusion on welfare in subsaharan africa. 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. 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. 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. An examination of the impact of financial inclusion on.
Financial stability was introduced in the study as a moderating variable between financial regulation and financial inclusion. The views expressed are those of the authors and do not necessarily represent those of the funder, ersa or the authors affiliated institutions. Financial technology, sub saharan africa, case study. Review of fintech strategies for financial inclusion in sub. Pdf this paper summarizes financial inclusion across africa. Mobile drives financial inclusion in africa, growing 20% in.
Identification, financial inclusion and development in subsaharan africa the findex notes. Financial inclusion design in subsaharan africa blog 11. 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. Eleven of those 16 countries now have new or expanded world bank groupfinancial accessinclusion projects. Globally, only 58 percent of women hold an account in a formal financial institution, compared to 65 percent of men demirguckunt et. This study examine the impact of financial inclusion on poverty reduction in forty nine subsaharan african countries using data spanning the. The emanated findings consistently stress the importance of institutions together with other control variables like gdp per capita, inflation, bank. After a decade of strong growth, mediumterm economic prospects are still bright. 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. Financial regulation and financial inclusion in sub. In this paper we study how competition and financial soundness affect financial inclusion in subsaharan africa ssa. Kennedy komba during the roundtable, digital financial inclusion in subsaharan africa, in berlin earlier this year.
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