Financial inclusion and economic growth the moderating role of financial stability in Sub-Saharan Africa

Abstract

This study departs from empirical literature by considering the moderating role of financial stability in the nexus of financial inclusion and economic growth in Sub- Saharan Africa. An explanatory research design was employed to achieve this, and data was collected from twenty (20) Sub-Saharan African countries from 2012 to 2022. This is a quantitative study that utilizes the Generalized method of moments (GMM) estimation technique to analyse the collected data. The study's findings revealed that financial inclusion positively and significantly influenced economic growth. Additionally, it was observed that financial stability also played a significant role in predicting the growth trajectory of Sub-Saharan African countries. Furthermore, the study discovered that financial stability positively and significantly moderated the relationship between financial inclusion and economic growth. Based on these findings, the study recommends policymakers in developing countries to prioritise implementing financial inclusion policies. It also suggests implementing complementary policies to enhance financial development, institutional quality, and trade openness. Moreover, the study proposes that future research should focus on exploring the impact of financial inclusion on other dimensions of development, such as poverty reduction and income inequality.