Examining the Nexus Between Financial Inclusion (FI) and Economic Growth (EG) in The Lower-Middle Income (LMI) Africa Countries (2004-2023) (Published)
This study examined the impact of financial inclusion using proxies like automated teller machines (ATMs) and outstanding loans from commercial bank on economic growth in selected ten selected LMI Africa countries covering the duration from 2004 to 2023. Panel data sourced from the World Bank’s World Development Indicators as well as Central Bank of Nigeria statistical database were used. Using an ex-post facto research design, and using descriptive statistics and panel regression techniques for data analysis of 10 lower-middle income Africa countries. The empirical results show that the number of ATMs per 100,000 adults has a negative and statistically significant effect on economic growth, suggesting that the financial infrastructure expansion only does not necessarily translate into better economic growth. In comparison, number of outstanding loans from commercial banks per 1000 adults show a positive and significant relationship with economic growth, showing that access to credit plays an important role in thrilling investment and economic activities. In conclusion, financial inclusion contributes to the growth of economy via financial depth instead of financial accessibility in the ten selected countries. The study recommends promotion of financial illiteracy for improved financial inclusion policies effectiveness, strengthening credit delivery systems, and enhancing financial infrastructure efficiency.
Keywords: Automated Teller Machines, Financial Inclusion, lower-middle income Africa countries, outstanding loans from commercial banks, real gross domestic product (rGDP)