The micro determinants of financial inclusion and financial resilience in Africa
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Date
2022
Journal Title
Journal ISSN
Volume Title
Publisher
African Development Review
Abstract
This study analyzes the factors influencing financial inclusion and financial
resilience in Africa. Using national surveys of 40 African countries and the
When doing business database, multiple models are performed to analyze financial
inclusion drivers. The results show that individual characteristics, barriers to
formal accounting, financial literacy and innovation condition the decision to
have a traditional or mobile account. Informal savings are common among
women, youth and in rural areas, while formal savings predominate among
men, the elderly and in urban areas. A high level of education and income
leads people to migrate to formal savings. For business purposes, informal
savings are preferred, while for old age, individuals resort to formal savings
because of interest rates. Social lifestyles make informal credit predominate in
Africa. However, when people have employment, high income or education,
they turn more to formal credit to preserve their reputation because of the
respect and popularity they enjoy in their community. Marriage, financial
literacy and innovation improve the resilience of individuals, while employment increases their vulnerability. Key policy recommendations are to
improve the banking sector, institutions, innovations and income-generating
activities to attract women and reduce the gender gap.
Description
Research Article
Keywords
financial inclusion, financial literacy, innovation