Acta Universitatis Danubius. Œconomica, Vol 15, No 4 (2019)

Financial Inclusion Condition in Africa and its determinants

Tough Chinoda, Farai Kwenda


This study assessed the financial inclusion condition in Africa and its determinants. We used the Financial Inclusion index computed through the Principal Component Analysis to study countries for the period 2004 to 2016. We found wide discrepancies in financial inclusion amongst the 49 African countries under study. Only two countries had an average financial inclusion index above 50 percent, and the majority are below 40 percent validating the argument that the African region need immediate intervention. Hence, we concluded that the African region has financial inclusion gaps and is contestable. We also found a significant positive relationship between financial inclusion and other variables such as its lagged value, financial development, income level,and availability of credit and a negative association with money supply, inflation and population size.As such, we recommended that policy makers should device measures to ensure an ongoing financially inclusive environment while stimulating other variables which acts as barriers to financial inclusion.


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