Digital Inclusion and Financial Sector Growth in Selected African Countries
No Thumbnail Available
Date
2024-11
Journal Title
Journal ISSN
Volume Title
Publisher
Lead City Journal of the Social Sciences (LCJSS), Volume 9 (No. 3), Nov. 2024
Abstract
Many countries, including African nations, are now embracing to modern technology and
digitalisation of their economies through internet resources. This study seeks to determine
whether digital inclusion contributes to the growth of financial system in African countries by
examining both money and capital market variables. The study obtains data from World Bank
Development Indicators and the international Monetary Fund database for 8 African countries
accross the four regional blocks from 2000 to 2022. The FMOLS technique is employed to
perform multiple regressions of financial sector variables on digital inclusion variables.
Findings indicate that the proportion of internet users has positive and significant effect on
commercial bank branch expansion in the money market and market capitalisation in the capital
market. Mobile cellular subscriptions are also found to have apositive and significant effect on
commercial bank branch expansion and stock traded. Additionally, the deposit interest rate has
positive and significant effect on credit to private sector in the money market and market
capitalisation in the capital market, while it is insignificant effect on commercial bank branch
expansion and stock traded in the stock exchange. The study recommends that digital
infrastructure should be upgraded in African countries to meet global requirements in order to
maximise financial sector’s potential benefits from worldwide digitalisation and technological
transformation.
Description
Keywords
Digital Inclusion, Money Market, Capital Market, Financial Sector, Digital Infrastructure