Disaggregating digital financial inclusion in Africa: Explaining within- and between-country variance

This study examines the extent to which individual- and country-level characteristics account for variations in the use of digital payments across 36 African countries. Using a two-level random intercept multilevel probit model, we analyse cross-sectional data to estimate the probability of digital financial inclusion while accounting for the hierarchical structure of individuals nested within countries. The analysis quantifies the proportion of variance in digital payment usage that is attributable to country-level versus individual-level factors, using intraclass correlation coefficients (ICCs). The results reveal that most of the explained variance (75 %) stems from individual characteristics like age, education, gender, income, employment, and internet access. However, country-level factors;particularly national education levels and employment levels, also play a meaningful role. These findings highlight the importance of both micro- and macro-level determinants in shaping digital financial behaviours and demonstrate the need for context-sensitive policies to promote inclusive digital finance.