IMPACT OF FINANCIAL INCLUSION ON POVERTY IN WEST AFRICAN COUNTRIES
Safina Haliru Sarki, Daud Mustafa, PhD and Martin Iyoboyi, PhD
Volume 3 Issue 2
Abstract
The study investigates the impact of financial inclusion on poverty in 15 developing countries in West Africa from 2011 - 2020 based on a composite financial inclusion index constructed using panel data analysis. The study employed the estimation approach which is the differenced Generalized Method of Moments (GMM) and system GMM approach to establish the short and long-run relationships. Financial inclusion was measured using the three (3) demising of accessibility, availability and usage demission using commercial bank branches (CBB) to measure availability. Also, credit to private sector (CPS) to measure accessibility, while automated teller machine (ATM) to measure usage demission of the financial sector. The results of the study show that Automated Teller Machine has insignificant impact on poverty, whereas commercial bank branches, domestic credit from banking sector and domestic credit from the private sector (DCPS) have significant impact on poverty Therefore, the study recommends that financial sector development should focus on the availability, accessibility usage and depth of credit to cover substantial poor and rural populace to help improve their access to financial services, enable them to increase their income and reduce the income gap between rural and urban areas. Keywords: Financial inclusion; Panel GMM model; Poverty; Financial inclusion index; West Africa
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