Nexus Between Financial Inclusion and Inclusive Growth, The East Africa Case Study

Abstract:

This article empirically investigates the quantitative relationship between financial inclusion and inclusive growth in the East Africa Region. The study employs Driscoll and Kraal's augmented fixed effects estimation technique to analyze data from year 2011 to 2021 for five Eastern African Countries. The results show that inclusive growth is positively impacted by financial inclusion. In terms of usage of financial services by gender, on average, a percentage increase in female account ownership and male account ownership will lead to a 0.025% and 0.024% increase in inclusive growth, respectively. The study also found a link between prosperity and inclusive development. This data emphasizes the need for the creation of special agents' tools to provide financial services to the underprivileged and women, as well as the recommendation that financial institutions implement programs to raise adult populations' financial literacy in order to increase access and usage of financial services.