TY - JOUR
T1 - Financial inclusion and financial sector development in Sub-Saharan Africa
T2 - a panel VAR approach
AU - Anarfo, Ebenezer Bugri
AU - Abor, Joshua Yindenaba
AU - Osei, Kofi Achampong
AU - Gyeke-Dako, Agyapomaa
N1 - Publisher Copyright:
© 2019, Emerald Publishing Limited.
PY - 2019/7/31
Y1 - 2019/7/31
N2 - Purpose: The purpose of this paper is to investigate the dynamic link between financial inclusion and financial sector development (FSD) in Sub-Saharan Africa. Design/methodology/approach: This paper employs a panel vector autoregressive framework to examine the dynamic link between financial inclusion and FSD in Sub-Saharan Africa. Findings: The findings indicate that there is a reverse causality between FSD and financial inclusion in both the Sub-Saharan Africa countries sample and the full sample. It is evident that financial inclusion is a driver of FSD and vice versa. Practical implications: The practical implication of this study is that financial inclusion should not only be pursued as a policy objective but it could also be an outcome variable of FSD and vice versa. This implies that African economies and governments in their effort to enhance financial inclusion, FSD can serve as a policy tool. This means that policies aimed at promoting financial inclusion will not impede FSD because the two are complementary. This suggests that we can achieve financial inclusion without sacrificing FSD and vice versa. Originality/value: This paper provides first empirical evidence of the link between financial inclusion and FSD from the Sub-Saharan Africa perspective using data sourced from World Development Indicators spanning from 1990 to 2014 for 48 Sub-Saharan African economies and 217 economies in the world for the full sample.
AB - Purpose: The purpose of this paper is to investigate the dynamic link between financial inclusion and financial sector development (FSD) in Sub-Saharan Africa. Design/methodology/approach: This paper employs a panel vector autoregressive framework to examine the dynamic link between financial inclusion and FSD in Sub-Saharan Africa. Findings: The findings indicate that there is a reverse causality between FSD and financial inclusion in both the Sub-Saharan Africa countries sample and the full sample. It is evident that financial inclusion is a driver of FSD and vice versa. Practical implications: The practical implication of this study is that financial inclusion should not only be pursued as a policy objective but it could also be an outcome variable of FSD and vice versa. This implies that African economies and governments in their effort to enhance financial inclusion, FSD can serve as a policy tool. This means that policies aimed at promoting financial inclusion will not impede FSD because the two are complementary. This suggests that we can achieve financial inclusion without sacrificing FSD and vice versa. Originality/value: This paper provides first empirical evidence of the link between financial inclusion and FSD from the Sub-Saharan Africa perspective using data sourced from World Development Indicators spanning from 1990 to 2014 for 48 Sub-Saharan African economies and 217 economies in the world for the full sample.
KW - Economic growth
KW - Financial inclusion
KW - Financial sector development
KW - Panel vector autoregression
UR - http://www.scopus.com/inward/record.url?scp=85064266141&partnerID=8YFLogxK
U2 - 10.1108/IJMF-07-2018-0205
DO - 10.1108/IJMF-07-2018-0205
M3 - Article
AN - SCOPUS:85064266141
SN - 1743-9132
VL - 15
SP - 444
EP - 463
JO - International Journal of Managerial Finance
JF - International Journal of Managerial Finance
IS - 4
ER -