Effect of Financial Inclusion on Income Inequality in Sub-Saharan Africa
Kipoh Mpele Esther *
Center for Study and Research in Management and Economics, University of Dschang, BP: 110, Dschang, Cameroon.
*Author to whom correspondence should be addressed.
Abstract
Aims: To analyze financial inclusion as a channel to alleviate inequality in order to provide insight into the edifice of inequality reduction.
Study Design: Dynamic panel study.
Place and Duration of Study: Sub-Saharan African countries over the period 2004-2018.
Methodology: Using the generalized method of moments (GMM) on a sample of 27 Sub-Saharan African countries.
Results: The results show that the estimated financial inclusion index has a negative effect on income inequality. Therefore, the depth of commercial bank branches and the effective use of bank accounts reduce income inequality.
Conclusion: Increase financial inclusion as well as the development of financial infrastructure and the provision of specific low-cost services tailored to low-income households.
Keywords: Financial inclusion, financial inclusion index, GMM, income inequality.