Financial inclusion as a catalyst for economic resilience
Insights from Africa
Keywords:
Financial inclusion, Economic resilience, Regional development, Economic growthAbstract
With a focus on African nations, this study examines the contribution of financial inclusion to the strengthen of economic resilience. Through an empirical approach based on macroeconomic data for 12 African countries from 2004 to 2022, it assesses the impact of various financial inclusion indicators, such as the deposit accounts with commercial banks per 1000 adults, the number of commercial bank agencies per 100000 adults, the outstanding deposits with commercial banks (% of GDP), and the outstanding loans from commercial banks (% of GDP), including control variables, on a composite economic resilience index.
The findings demonstrate a significant positive impact of deposit accounts with commercial banks and financial acces (via outstanding deposits and loans) on economies' ability to withstand shocks and recover. However, the number of commercial bank agencies occasionally has ambiguous effects, indicating that physical access alone may not guarantee effective financial inclusion.
Therefore, the study suggests promoting high-quality financial inclusion based on active use, institutional trust, and regulation. It also advocates for incorporating financial inclusion into national resilience strategies as part of an equitable and sustainable development logic.
This study aims to fill the gap in empirical research on the relationship between financial inclusion and economic resilience, focusing on the channel via which financial inclusion strengthens the economic resilience of African nations. It provides a thorough analysis of the relationship using robust economic tools, highlighting the need for further research on the effects of financial inclusion on territorial resilience.
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