Determinants of financial inclusion in sub-Saharan Africa and OECD countries

Using a dynamic panel data analysis, we explore the factors that influence financial inclusion in sub-Saharan Africa (SSA) and other regions, using member countries of the Organization for Economic Cooperation and Development (OECD) as a benchmark. We employ a system generalized methods of moments estimator and assess 31 SSA and 38 OECD countries from 2000 to 2021. We show that the literacy rate, trade openness, political stability, bank efficiency, income, and remittances are key factors with various impacts across regions. We further show that various dimensions of a financial system (access, usage, and quality) are impacted by different indicators and to varying extent. We account for events during the period, such as the global financial crisis and COVID-19 outbreak. We highlight the importance of quality literacy policies and a more efficient financial system in promoting financial inclusion. We recommend improving trade regulatory frameworks that promote trade openness through stronger institutions.