Social and institutional determinants of digital financial inclusion in Africa: A system GMM Approach

Evans, Olaniyi (2022): Social and institutional determinants of digital financial inclusion in Africa: A system GMM Approach. Published in: Actual Problems in Economics No. 247 (2022): pp. 49-62.

Abstract

African nations have shown remarkable promise in digital financial services in recent years. However, much more remains to be done. Given this background, this study empirically investigates the social and institutional determinants of digital financial inclusion for a panel of 42 African countries using system GMM for the period 1995-2018. The empirical results show that social factors such as literacy, infrastructure, unemployment rate and standard of living have significant influence on digital financial inclusion. These results suggest that social realities matter for digital financial services. Equally, institutional factors such as political stability and absence of violence, control of corruption, regulatory quality, government effectiveness and rule of law have statistically significant and positive effects. These results suggest that better governance and better institutions correlate with faster digital financial inclusion. The estimates are robust to changes in estimation methods.

• Item Type: MPRA Paper
• Language: English
• Keywords: digital financial services, social and institutional determinants
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion Processes; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O35 - Social Innovation

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