The determinants of financial inclusion in Africa

TLDR

The objective of this paper is to examine the determinants of financial inclusion in Africa. We use the World Bank's Global Findex database on 37 African countries to perform probit estimations. The study finds that gender, income, education, and age drive financial inclusion, with education and income having the strongest effects, mobile banking shares the same determinants, informal finance is influenced by different factors, and these insights can inform policies to enhance inclusion in Africa.

Abstract

The objective of this paper is to examine the determinants of financial inclusion in Africa. We use the World Bank's Global Findex database on 37 African countries to perform probit estimations. We find that being a man, richer, more educated and older favor financial inclusion with a higher influence of education and income. Mobile banking is driven by the same determinants than traditional banking. We observe that the determinants of informal finance differ from those of formal finance. Our work therefore contains findings to design policies to foster financial inclusion in African countries.