Financial Inclusion as a Gateway to Human Development in Africa

Abstract

In this paper, we investigate the relationship between financial inclusion and human development in Africa using annual data from 45 African countries covering the period 2000-2020. In analyzing the data, the generalized method of moments (GMM) technique is adopted. The results show that financial inclusion positively and significantly influences human development in Africa, implying enhancing financial inclusion engenders human development. The findings also reveal that financial development and economic growth have a positive significant effect on human development while trade openness and human development are negatively related. Following from the findings it is recommended that national governments and connected stakeholders should step up efforts to deepen financial inclusion as a critical pathway to enhancing human development.