Financial Inclusion and Poverty Rate in Sub-Sahara Africa: Does Institutional Efficiency Matter?


Gregory Ehidiamen Oamen, Andy Titus Okwu, Jerry Kwarbai

DOI10.5110/77. 1406               Page:   76-90          Vol: 19    Issue: 04   Year: 2024

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One of the United Nation’s Sustainable Development Goals (SDGs) is eradication. In line with this, governments of sub-Saharan African (SSA) countries and international agencies have taken various poverty-reducing initiatives like financial inclusion and institutional reforms, social reengineering and humanitarian interventions. This study examined the critical role of institutional efficiency in reducing poverty rate in sub-Saharan Africa through financial inclusion mechanisms. For our analysis, we deployed the system generalized Methods of Moments (system-GMM) in a panel data environment, with time scope of 18 years and cross-sectional scope of 29 SSA countries. We found significant positive self-replicating effect of poverty rate, heterogeneous effects of financial inclusion, and unimpressive role of the institutions for the linear system-GMM. However, the role of institutions enhances the effect of financial inclusion in the context of nonlinear system-GMM procedure. Consequently, we emphasized that, in the quest to reduce poverty rate in the SSA region, relevant authorities should evolve informed policy options anchored on real time tracking movements in poverty rates. 

GEL Classifications: E 44, G21, I32


Financial inclusion, Poverty rate, institutional efficiency, System-GMM, Sub-Saharan Africa.

Received: 30 March 2024

Accepted:  11 April 2024

Published: 18 April 2024