Loughborough University
Essays on Financial Inclusion Determinants and Role in Sub-Saharan Africa.pdf (4.36 MB)

Essays on financial inclusion determinants and role in Africa

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posted on 2023-11-16, 15:36 authored by Fatima Jika-AbdullahiFatima Jika-Abdullahi

The aim of this thesis is to present an empirical analysis on the role and benefit of promoting financial inclusion as an important element of financial system development and inclusive growth. Achieving appreciable levels of financial inclusion and its impact on stability requires addressing various challenges and potential trade-offs. This research first presents a spatial analysis of financial inclusion to establish that there are individual and regional benefits to financial inclusion in Africa. Also included in this thesis are broad empirical studies focused on the role of banks, in actualizing higher and sustainable levels of financial inclusion in Africa.

We analyse the possible effects of increased level of financial inclusion on the level of bank stability in Africa.

We provide a brief overview and background literature of the African financial on Africa. Presented in the second chapter is an analysis of the spatial effects and determinants of financial inclusion in Africa. We construct an African Financial Inclusion Index by applying Principal Component Analysis to the dimensions of financial outreach and usage. The findings confirm geographical spatial distribution across Africa. The study revealed that spatial spillover exists within the thirty-one African countries in sample and also on a regional basis. Furthermore, the results showed the structural disadvantages that retard the attainment of appreciable levels of financial inclusion compared to other parts of the world. An analysis of demand side, supply side and social indicators to examine dependence and aggregation effects indicated that the level of income depicted by GNI, internet and gender were significant demand side indicators on the level of financial inclusion. Supply side factors and social factors indicate that financial health, GDP, GINI and economic freedom impact the levels of financial inclusion in Africa.

The third chapter aims to establish the relationship between financial inclusion and bank stability. It measures the impact of financial inclusion on bank stability in Africa, using a panel of 48 African from the 2014 to 2018; we construct a composite index of Africa financial inclusion and fixed effects analysis. The results affirmed that financial inclusion impacts bank stability positively and an inclusive financial system was good for bank stability. It revealed that bank stability changes overtime and found bank size and loan ratio were significant variables. The results affirm that financial inclusion is associated with greater bank stability in essence less risk of failure depicted. The results confirmed that the quality of banks and size of the economy matter.

The final chapter is an overview of the thesis contributions and policy recommendations; it focuses on indicators and diagnostics on the level financial inclusion in Africa. The spatial spillover results provided useful empirical backing for the need for policymakers to harmonize and tailor policies for synergistic benefits that will scale up the level of financial inclusion in Africa.


Central Bank of Nigeria



  • Loughborough Business School


Loughborough University

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© Fatima Abdullahi Jika

Publication date



A Doctoral Thesis. Submitted in partial fulfilment of the requirements for the award of the degree of Doctor of Philosophy of Loughborough University.


  • en


Karligash Glass ; Justine Wood ; Morakinyo Adetutu

Qualification name

  • PhD

Qualification level

  • Doctoral

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