Does institutional quality affect financial inclusion in Africa? A panel data analysis

In this article, we investigate the impact of institutional quality on financial inclusion with a sample of fifty-one African countries. We specify and estimate a dynamic panel data model with the system-generalized method of moments (sys-GMM) over the period 2004-2018, based on different approaches to financial inclusion. Our results show that institutional quality increases financial inclusion as well as the penetration, accessibility, and use of financial services in Africa. These results remain robust to the provision of financial education. Acceleration of income-generating activities in Africa will require improvement in financial institutions.