Financial inclusion in Africa: Does it promote entrepreneurship?
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Date
2020-11-30
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Volume Title
Publisher
Emerald Insight
Abstract
system. Financial inclusion has a lot of benefits in the society. It can reduce the level of poverty, inequality and
encourage business startup. This study aims to examine the impact of financial inclusion on entrepreneurship
in selected African countries.
Design/methodology/approach – This paper examines how financial inclusion impacts
entrepreneurship in 13 selected African countries using data fromWorld Bank Development Indicators, IMF’s
International Financial Statistics, doing business and World Bank Entrepreneurship Survey for the period of
2005-2016. It uses panel data regression techniques such as random effect, IV estimation and robust least
square.
Findings – The results show that financial inclusion has a significant and positive effect on
entrepreneurship in Africa. This result is robust to both alternative measures of financial inclusion and
alternative estimators.
Originality/value – The possible relationship between financial inclusion and entrepreneurial
development has been an ongoing debate in other developing countries. However, this issue has been
neglected in the African region. There are little or no evidence to support the possible relationship in Africa.
This paper makes an important contribution in this respect and further provides insightful information in the
ongoing debate.
Description
Keywords
Financial inclusion, Firm creation, Random effect, Stating a business, Africa, Banks, Economic development, Financial markets, Financing policy
Citation
Ajide, F. M. (2020). Financial inclusion in Africa: Does it promote entrepreneurship? Journal of Financial Economic Policy, 12(3), Published by Emerald Insight. Available online at https://www.emerald.com/insight/publication/issn/1757-6385/vol/12/iss/4