eterogeneous Effects of Financial Inclusion on Economic Growth Across Income Groups in Sub-Saharan Africa

Authors

  • Oloruntoba OYEDELE Department of Accounting Science, Walter Sisulu University, Mthatha, South Africa.

DOI:

https://doi.org/10.36325/ghjec.v22i3.24595.

Keywords:

Financial Inclusion, Economic Growth, Sub-Saharan Africa, System GMM, Institutional Quality, Financial Development

Abstract

 Background: The importance of financial inclusion has become a major topic in the literature of sustainable economic growth and development especially in some regions like in the SSA countries. Financial inclusion is considered as an accessibility of affordable financial products and services to individuals and companies as well as the use of the financial products and services to integrate into the formal financial systems

Objectives: The purpose of this paper is to analyze the role of financial “inclusion on the growth in the SSA region over the panel period of 2004-2024.

Methods:  A System GMM is used to analyze the relationship in question which addresses the endogeneity and the dynamic impacts in Sub-Saharan African countries that includes Low-Income countries, Lower-Middle-Income countries and Upper-Middle-Income countries

Results: The findings indicate that financial inclusion has a positive but statistically insignificant impact on economic growth in LIC (0.006) and LMIC (0.017), while it shows a negative and statistically insignificant effect in UMIC (-0.041). Investment contributes positively to growth in LIC (0.037) and LMIC (0.114), but negatively in UMIC (-0.033). Good governance positively influences growth in LIC (0.051) and UMIC (0.132). In the long run, financial inclusion demonstrates a stronger and more significant role, particularly in UMIC (0.772), suggesting that its effects materialize over time

Conclusion: Overall, the study finds that financial inclusion promotes economic growth more effectively when complemented by good governance, investment, and human capital, highlighting the importance of a supportive institutional and economic environment.

Downloads

Download data is not yet available.

References

Adeleye, N., Osabuohien, E., & Bowale, E. (2020). The role of financial inclusion in economic growth in Sub-Saharan Africa. Journal of Economic Studies. https://doi.org/10.1108/JES-08-2018-0279

Allen, F., Demirgüç-Kunt, A., Klapper, L., & Peria, M. S. M. (2016). The foundations of financial inclusion. Journal of Financial Intermediation, 27, 1–30. https://doi.org/10.1016/j.jfi.2016.04.001

Balogun, A. A., Oyelude, Y. O., Afolabi, B., et al. (2025). Financial inclusion and economic growth in Sub-Saharan Africa: A panel ARDL and Granger non-causality approach. Œconomica. https://www.researchgate.net/publication/387948765

Bashir, M. S., & Elamin, A. A. H. (2026). Do financial innovation and financial deepening promote economic growth in Sub-Saharan Africa? Economies, 14(2), 38. https://doi.org/10.3390/economies14020038

Beck, T., Demirgüç-Kunt, A., & Levine, R. (2007). Finance, inequality and the poor. Journal of Economic Growth, 12(1), 27–49. https://doi.org/10.1007/s10887-007-9010-6

Cagiza, C. B. C. D. S. (2025). De-risking development in Sub-Saharan Africa: A qualitative study of investment dynamics in Angola. arXiv. https://arxiv.org/abs/2510.18906

Cagiza, C. B. C. D. S., & Cagiza, I. (2025). Development finance institutions, political conditions, and foreign direct investment in Sub-Saharan Africa. arXiv. https://arxiv.org/abs/2510.16472

Demirgüç-Kunt, A., Klapper, L., Singer, D., & Oudheusden, P. V. (2015). The Global Findex Database 2014: Measuring financial inclusion around the world. World Bank Policy Research Working Paper. https://doi.org/10.1596/1813-9450-7255

Evans, O. (2016). The effects of financial inclusion on economic growth in Africa. Review of Development Finance, 6(1), 46–57. https://doi.org/10.1016/j.rdf.2016.05.001

Honohan, P. (2008). Cross-country variation in household access to financial services. Journal of Banking & Finance, 32(11), 2493–2500. https://doi.org/10.1016/j.jbankfin.2008.05.004

Ifediora, C., Offor, K. O., Eze, F. E., Takon, S. M., Ageme, A. E., Ibe, G. I., & Onwumere, J. U. J. (2022). Financial inclusion and its impact on economic growth: Empirical evidence from Sub-Saharan Africa. Cogent Economics & Finance, 10(1), 2060551. https://doi.org/10.1080/23322039.2022.2060551 (Directory of Open Access Journals)

Jallow, I. A., & Tajmouati, S. (2025). Determinants of financial and digital inclusion in West and Central Africa: Evidence from binary models with cross-validation. arXiv. https://arxiv.org/abs/2511.12179

Jima, M. D., & Makoni, P. L. (2023). Causality between financial inclusion, financial stability and economic growth in Sub-Saharan Africa. Sustainability, 15(2), 1152. https://doi.org/10.3390/su15021152 (MDPI)

Jima, M. D., & Makoni, P. L. (2023). Financial inclusion and economic growth in Sub-Saharan Africa—A panel ARDL and Granger non-causality approach. Journal of Risk and Financial Management, 16(6), 299. https://doi.org/10.3390/jrfm16060299

Jima, M. D., & Makoni, P. L. (2023). Financial inclusion and economic growth in Sub-Saharan Africa—A panel ARDL and Granger non-causality approach. Journal of Risk and Financial Management, 16(6), 299. https://doi.org/10.3390/jrfm16060299 (MDPI)

Kim, D. W., Yu, J. S., & Hassan, M. K. (2018). Financial inclusion and economic growth in OIC countries. Research in International Business and Finance, 43, 1–14. https://doi.org/10.1016/j.ribaf.2017.07.178

Lenka, S. K., & Sharma, R. (2017). Does financial inclusion spur economic growth? Evidence from India. The Journal of Developing Areas, 51(3), 215–228. https://doi.org/10.1353/jda.2017.0069

Meniago, C. (2025). Digital financial inclusion and economic growth: The moderating role of institutions in SADC countries. International Journal of Financial Studies, 13(1), 4. https://doi.org/10.3390/ijfs13010004

Menyah, K., Nazlioglu, S., & Wolde-Rufael, Y. (2014). Financial development, trade openness and economic growth in African countries. Economic Modelling, 37, 386–394. https://doi.org/10.1016/j.econmod.2013.11.044

Naceur, S. B., Barajas, A., & Massara, A. (2015). Can financial development boost growth and reduce inequality? IMF Working Paper. https://doi.org/10.5089/9781498322008.001

Nguema, A. E., & Lera, D. D. (2025). Bridging the gap: Digital finance, financial inclusion, and their impact on economic growth in Sub-Saharan Africa – A systematic review with policy insights. Journal of Economics and Sustainable Development, 16(2). https://www.iiste.org/Journals/index.php/JEDS/article/view/63053

Osuma, G. (2024). The impact of financial inclusion on poverty reduction and economic growth in Sub-Saharan Africa: A comparative study of digital financial services. Social Sciences & Humanities Open, 11, 101263. https://doi.org/10.1016/j.ssaho.2024.101263

Osuma, G. (2025). The impact of financial inclusion on poverty reduction and economic growth in Sub-Saharan Africa: A comparative study of digital financial services. Social Sciences & Humanities Open, 11, 101263. https://doi.org/10.1016/j.ssaho.2024.101263 (ResearchGate)

Oyedotun, I. K., & Makoni, P. L. (2026). Nexus between financial technology and financial inclusion in Sub-Saharan Africa: A dynamic panel technique. SAGE Open. https://doi.org/10.1177/21582440251407742

Ozili, P. K. (2021). Financial inclusion research around the world: A review. Forum for Social Economics, 50(4), 457–479. https://doi.org/10.1080/07360932.2020.1715238

Park, C. Y., & Mercado, R. (2018). Financial inclusion, poverty, and income inequality. The Singapore Economic Review, 63(1), 185–206. https://doi.org/10.1142/S0217590818410059

Sahay, R., Cihak, M., N’Diaye, P., et al. (2015). Financial inclusion: Can it meet multiple macroeconomic goals? IMF Staff Discussion Note. https://doi.org/10.5089/9781513589683.006

Sarma, M., & Pais, J. (2011). Financial inclusion and development. Journal of International Development, 23(5), 613–628. https://doi.org/10.1002/jid.1698

Segning, B. A., Djiogap, C. F., Piabuo, S. M., & Noupie, E. N. (2024). Financial inclusion and income inequality in Sub-Saharan Africa: Taking socio-cultural particularities into account. Journal of the Knowledge Economy. https://doi.org/10.1007/s13132-023-01207-x

Sharma, D. (2016). Nexus between financial inclusion and economic growth: Evidence from the emerging Indian economy. Journal of Financial Economic Policy, 8(1), 13–36. https://doi.org/10.1108/JFEP-01-2015-0004

Zins, A., & Weill, L. (2016). The determinants of financial inclusion in Africa. Review of Development Finance, 6(1), 46–57. https://doi.org/10.1016/j.rdf.2016.05.001

Downloads

Published

2026-09-30

Issue

Vol. 22 No. 3 (2026): Al-Ghary Journal for Economic and Administrative Sciences

Section

Articles

License

Copyright (c) 2026 أولورونتوبا أوييديلي

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

which allows users to copy and create excerpts and summaries, and thus create new scientific works from the article or modify it and benefit from the scientific material, provided that the user refers to the link to the original article

How to Cite

OYEDELE, O. (2026) “eterogeneous Effects of Financial Inclusion on Economic Growth Across Income Groups in Sub-Saharan Africa”, Al-Ghary Journal of Economic and Administrative Sciences, 22(3), pp. 20–37. doi:10.36325/ghjec.v22i3.24595.

Share