IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 6 NO. 2 2020

---

Impact of Financial Inclusion on Unemployment in Sub-Saharan Economies: A Study of Nigeria and Ghana

Okoro, C. E. (PhD); Obiekwe, C. J. (Ph.D); Okoro, O. K

---

Abstract

This paper was undertaken to empirically investigate the impact of financial inclusion on Sub- Saharan economies referencing Nigeria and Ghana for the period 1985 to 2018. Data was sourced from the World Development Indicator (WDI), Statistical Bulletins of the selected Central Banks and National Bureau of Statistics. Unemployment rate (UNPR) was used proxy for the sampled economies while Commercial banks credit to private sector (BCPS), lending interest rates (LINT), number of rural bank branches (NRBB), Total bank loans to rural dwellers (CBLR), Bank Credit to Agriculture (CBCA) and commercial banks liquidity ratios (LIQR) were financial inclusion proxies. From the data observed on the 2 Sub-Saharan African (SSA) countries and by using the dynamic panel statistical techniques, we were able to show that there exists a significant link between financial inclusion and the sampled economies. The coefficient of determination indicated that about 75 percent of the total variations in unemployment rate are explained by the financial inclusion variables in the model. Consequently, the study recommended that the Central Banks should make policies that will encourage proper checks on the exploitative tendencies of commercial banks so as to lower cost of capital; “Rural Credit Guarantee Scheme (RCGS)” should be established in order to favorably incorporate the interest of rural dwellers into the financial cycle.

---

References:

Adeola, O., & Evans, O. (2017). Financial inclusion, financial development, and economic
diversification in Nigeria. The Journal of Developing Areas, 51(3), 1-15.

Arora, R. U. (2010). Measuring financial access. Griffith University, Discussion Paper in
Economics,(7), 1-21.

Atay, E. & Apak, S. (2013). An overview of GDP and internet banking relations in the
European Union versus China. Social and Behavioural Sciences, 99, 36- 45.

Aterido, R., Beck, T., & Iacovone, L. (2013). Access to Finance in Sub-Saharan Africa: Is
There a Gender Gap? World development, 47, 102-120.

Babajide, A. A., Adegboye, F. B & Omankhanlen, A. E., (2015). Financial inclusion and
economic growth in Nigeria. International Journal of Economics and Financial Issues,
5(3): 629- 637.

Camara, N., Peña, X., & Tuesta, D. (2014). Factors that Matter for Financial Inclusion:
Evidence from Peru. The International Journal of Finance (forthcoming).

Chakravarty, S. R., & Pal, R. (2012). Measuring financial inclusion: An axiomatic approach.
Consultative Group to Assist the Poor annual report (CGAP) (2016). Advancing financial
inclusion to improve the lives of the poor. 1818 H, N.W., MSN IS7-700 Washington,
DC

Cull, R., & K. Scott. (2009). Measuring household usage of financial services: does it matter
how or whom You Ask ?” World Bank Policy Research Working Paper Series 5048.

Demirguc-Kunt, A., & Klapper, L. (2012). Measuring financial inclusion: The global findex
database. World Bank Policy Research Working Paper 6025.

Demirgüç-Kunt, A., Klapper, L. F., & Singer, D. (2013). Financial inclusion and legal
discrimination against women: evidence from developing countries. World Bank Policy
Research Working Paper(6416).

Diniz, E., Birochi, R., & Pozzebon, M. (2012). Triggers and barriers to financial inclusion: The
use of ICT-based branchless banking in an Amazon county. Electronic Commerce
Research and Applications, 11(5), 484-494.

Fungá?ová, Z., & Weill, L., (2015). Understanding financial inclusion in China. China
Economic Review (34) 196-206.

Gathembe, K. N., Magutu, O. P. & Muro, B. M. (2013). Electronic money transfer systems and
business process management among commercial banks in Kenya. European Scientific
Journal, 9(10), 102-118.

Greenwood, J., Sanchez, J. M. & Wang, C. (2013). Quantifying the impact of financial
development on economic development. Review of Economic Dynamics, 16(1), 194-
215.

Gretta, S. (2017). Financial inclusion and growth. The Business and Management Review.
Guerrero, A. (2011). Building mobile market share in Kenya. Global Finance, 25(9), 110.

Gupte, R., Venkataramani, B., & Gupta, D. (2012). Computation of financial inclusion index
for India. Procedia-Social and Behavioral Sciences, 37, 133-149.

Han R & Melecky M (2013). Financial inclusion for financial stability: Access to bank deposits
and the growth of deposits in the global financial crisis’, World Bank Policy Research
Working Paper No. 6577. World Bank, Washington.

Jisha, J. & Titto, V. (2014). Role of financial inclusion in the development of Indian economy
Journal of Economics and Sustainable Development www.iiste.org ISSN 2222-1700 5,
(11) ISSN 2222-2855

Khan H.R (2011). Financial inclusion and financial stability: are they two sides of the same
Coin?’,

Kwadwo, B., (2018) Ghana’s Progress on Reaching out to the Unbanked Through Financial
Inclusion International Journal of Management Studies ISSN (Print) 2249-0302 ISSN
(Online)2231-2528

Olaniyi, E. (2015). The Effects of Economic and Financial Development on Financial Inclusion
in Africa. Review of Economic and Development Studies, 17-25.

Onaolapo, A. (2015). Effects of financial inclusion on the economic growth of Nigeria,’ (1982-
2012). International Journal of Business and Management Review, 3(8), 11-28.

Sarma, M. & Pais, J. (2011). Financial inclusion and development. Journal of International
Development, 23(5), pp. 613-628.

Sarma, M. (2012). Index of financial inclusion: A measure of financial sector inclusiveness.
Berlin Working Papers on Money, Finance, Trade and Development. July, 2012. 1-34.

Schmeid, A. J. (2013). Financial Inclusion and Poverty: The Case of Peru. London: University
of Greenwich. Sciences (IJRESS), 265-271.

Sharma, D., (2016). Nexus between financial inclusion and economic growth: Evidence from
the emerging Indian economy”. Journal of Financial Economic Policy, 8(1), 13-36.

Tuesta, D., Sorensen, G., Haring, A., & Camara N. (2015). Financial inclusion and its
determinants: the case of Argentina. Working Paper No 15/03.

World Bank. (2012). Financial inclusion strategies reference framework. Washington DC:
World BanK

DOWNLOAD PDF

---

Back