ABSTRACT

This study examined the impact of financial inclusion on Sub-Saharan economies for the period of 32 years (1985 to 2017) using Nigeria and Ghana as study areas. The data for the study was sourced from both the Central Bank of Nigeria and Bank of Ghana Statistical bulletins as well as World Development Indicators and Global Financial Inclusion Database (GFI). In line with related empirical studies, the economies of Sub-Saharan Africa (SSA) region was proxied by Per Capital Income (PCIN), Gross Domestic Product growth rate (GDPG), Unemployment rate (UNPR) and Human Development Index (HUDI) while commercial banks credit to private sector (BCPS), lending interest rate (LINT), liquidity ratio (LIQR), financial deepening (FIND), commercial banks credit to rural dwellers (CBLR), number of rural bank branches (NRBB), commercial banks credit to agriculture (CBCA) and exchange rate (EXCR) were proxies for financial inclusion. In practice, the study constructed a panel dataset to investigate the level of impact and relationships among the selected variables. This study further departed slightly from the recent empirical literature by utilizing better measures of financial inclusion and by employing panel cointegration and regression analysis in addition to ARDL regression approach. Consistent with a priori expectation; the study found that there is significant impact of financial inclusion on the economies of Sub-Sahara African (SSA) region during the study period. Particularly, Commercial banks credit to private sector had significant impact on the economies of Sub-Saharan Africa; Lending interest rate negatively impacted on the Sub-Sahara African economies within the sample period; commercial banks credit to rural dwellers statistically affected the SSA economies within the selected period. The study recommended that Private Sector Credit Guarantee Scheme (PSCGS) should be establish in the region in order to give technical assistance and effective monitoring to the channels and uses of credits in the sector, Central Banks in the region should make policies that will control the cost of capital (lending interest rates) in order to successfully monitor commercial banks activities through Lending interest rate, the regional Governments should encourage the growth of local industries by making policies in favor of local contents in order to reduce over dependence on the central governments.