Does financial inclusion induce poverty, income inequality, and financial stability: empirical evidence from the 54 African countries?

Abstract

PurposeThe aim of the study is to examine the impact of financial inclusion on poverty, income inequality and financial stability using panel data of 54 African countries.Design/methodology/approachTo achieve this objective, the current study used multiple regressions across an unbalanced panel data of 54 African countries which are based on the four years mean value for the period 2001–2019.FindingsThe results show that financial inclusion (FI) is a valuable indicator; it reduces poverty, income inequality and improves financial stability.Research limitations/implicationsThe study invokes the attention of government and policymakers to build up a financially inclusive system which, in turn, leads to improve financial stability and lower poverty and income inequality. They should focus on quality and sustainable financial products and services in terms of financial inclusion to avoid dominant accounts and ensure consumer protection.Originality/valueThis adds to the scarce literature on the impact of financial inclusion on poverty, income inequality and financial stability in the context of African countries. The study contributes to the literature on the issue of financial inclusion and poverty, income inequality and financial stability by reconfirming (or otherwise) findings of previous studies.