Examining the linkages among financial inclusion, economic growth, poverty, and inequality reduction in Africa

Abstract

The study examined the nexus between financial inclusion and economic growth, poverty, and inequality in Fragile and Post-Conflict African economies based on data sourced from 2004 to 2021. The study employed the system GMM and dynamic threshold model within the context of the Tunnel and Joneses effects to analyze the data generating set. The study noted that financial inclusivity enhances growth, and reduces poverty and inequality in the studied economies. The results of robustness tests reveal that our model is appropriate, this suggests the validity of the Tunnel effect in the studied economies. The threshold dynamic result suggests that the optimal influence of financial inclusion on economic growth, poverty, and inequality is at 42% for the studied economies. The study offered some policy implications.