This paper analyzes the determinants of financial inclusion and proposes an instrument of measuring financial inclusion in West African Economic and Monetary Union (WAEMU) countries. WAEMU countries do not have a reliable synthetic index to measure their financial inclusion level. The need for an accurate way to assess financial inclusion in the WAEMU zone is imperative because a set of indicators has been adopted within the Regional Financial Inclusion Strategy by the Central Bank of West African States (CBWAS). Our panel regressions reveal that real GDP, mobile phone penetration, and literacy rate have a positive effect on financial inclusion. Conversely, the weight of the rural population and interbank credit is negatively associated with the level of financial inclusion. Agricultural financing via the credit channel that banks grant to the government is likely to increase financial inclusion. We also find a positive impact of rural-oriented literacy on financial inclusion.
KeywordsFinancial InclusionDeterminantsSynthetic IndexWAEMUPanel Data Analysis
Allen, F., Demirguc-Kunt, A., Klapper, L., Soledad, M., & Peria, M. (2016). The Foundations of Financial Inclusion: Understanding Ownership and Use of Formal Accounts. Journal of Financial Intermediation, 27, 1-30. https://doi.org/10.1016/j.jfi.2015.12.003
Alliance for Financial Inclusion (2010). Mesurer l’inclusion financière pour les organismes régulateurs: Conception et réalisation d’enquêtes. Document politique de l’AFI. Kuala Lumpur: Alliance for Financial Inclusion.
Beck, T., Demirguc-Kunt, A., & Martinez Peria, M. S. (2007). Reaching out: Access to and Use of Banking Services across Countries. Journal of Financial Economics, 85, 234-266. https://doi.org/10.1016/j.jfineco.2006.07.002
Bruhn, M., & Love, I. (2014). The Real Impact of Improved Access to Finance: Evidence from Mexico. The Journal of Finance, 69, 1347-1376. https://doi.org/10.1111/jofi.12091
Carbo, S., Gardener, E. P. M., & Molyneux, P. (2005). Financial Exclusion. London: Palgrave MacMillan. https://doi.org/10.1057/9780230508743
Chakravarty, S. R., & Rupayan, P. (2010). Measuring Financial Inclusion: An Axiomatic Approach. WP-2010-003, Mumbai: Indira Gandhi Institute of Development Research.
Chithra, N., & Selwam, M. (2013). Determinants of Financial Inclusion: An Empirical Study: On the Inter-State Variations in India. https://doi.org/10.2139/ssrn.2296096
Demirguc-Kunt, A., & Klapper, L. (2012a). Financial Inclusion in Africa: An Overview. Document de travail consacré à la recherche sur les politiques, No. 6088, Washington DC: Banque Mondiale. https://doi.org/10.1596/1813-9450-6088
Demirguc-Kunt, A., & Klapper, L. (2012b). Measuring Financial Inclusion: The Global Findex Database. Document de travail consacré à la recherche sur les politiques, No. 6025, Washington DC: Banque mondiale. https://doi.org/10.1596/1813-9450-6025
Demirguc-Kunt, A., & Levine, R. (2008). Finance, Financial Sector Policies, and Long-Run Growth. World Bank Policy Research Working Paper, No 11, Washington DC: World Bank. https://doi.org/10.1596/1813-9450-4469
Fungácová, Z., & Weill, L. (2015). Understanding Financial Inclusion in China. China Economic Review, 34, 196-206. https://doi.org/10.1016/j.chieco.2014.12.004
Gloukoviezoff, G. (2004). De la bancarisation de masse à l’exclusion bancaire puis sociale. Revue francaise des affaires sociales, 3, 9-38. https://doi.org/10.3917/rfas.043.0009
Guerineaun, S., & Jacolin, L. (2014). L’inclusion financière en Afrique subsaharienne: faits stylisés et déterminants. Revue d’économie financière, 4, 57-80. https://doi.org/10.3917/ecofi.116.0057
Gupte, R., Bhama V., & Deepa, G. (2012). Computation of Financial Inclusion Index for India. Procedia—Social and Behavioral Sciences, 37, 133-149. https://doi.org/10.1016/j.sbspro.2012.03.281
Gursharan Singh, K. (2011). Developing an Index of Financial Inclusion. Amritsar: Guru Arjan Dev Institute of Development Studies.
Honohan, P. (2008). Cross-Country Variation in Household Access to Financial Services. Journal of Banking and Finance, 32, 2493-2500. https://doi.org/10.1016/j.jbankfin.2008.05.004
Honohan, P., & Beck, T. (2007). Making Finance Work for Africa. Washington DC: World Bank. https://doi.org/10.1596/978-0-8213-6909-8
Kempson, E., Atkinson, A., & Pilley, O. (2004). Policy Level Response to Financial Exclusion in Developed Economies: Lessons for Developing Countries. Bristol: Personal Finance Research Centre, University of Bristol.
Kidanemariam, G., & Makina, D. (2015). Financial Inclusion in Africa: Evidence Using Dynamic Panel Data Analysis. ResearchGate. https://www.researchgate.net/publication/281107667
Kuldeep, S., & Kondan, S. (2012). Financial Inclusion, Development and Its Determinants: An Empirical Evidence of Indian States. The Asian Economic Review, 53, 115-134.
Leyshon, A., & Thrift, N. (1995). Geographies of Financial Exclusion: Financial Abandonment in Britain and the United States. Transactions of the Institute of British Geographers New Series, 20, 312-341. https://doi.org/10.2307/622654
Nitin, K. (2012). Financial Inclusion and Its Determinants: Evidence from State Level Empirical Analysis in India. Mumbai: Indira Gandhi Institute of Development & Research.
Sangaré, M. (2013). La microfinance: Quels liens entre les modèles de financement des institutions et la qualité des services offerts aux clients (342 p). Thèse de doctorat en Sciences économiques, Toulouse: Université Toulouse 1 Capitole.
Sarma, M. (2008). Index of Financial Inclusion. Working Paper No. 215, New Delhi: Indian Council for Research on International Economic Relations.
Sarma, M. (2015). Measuring Financial Inclusion. Economics Bulletin, 35, 604-611.
Sarma, M., & Pais, J. (2011). Financial Inclusion and Development: A Cross Country Analysis. New Delhi: Indian Council for Research on International Economic Relations.
Servet, J.-M. (2006). Banquiers aux pieds nus, la microfinance. Paris: éditions Odile Jacob.
Sinclair, S. P. (2001). Financial Exclusion: An Introductory Survey. Edinburgh: Centre for Research in Socially Inclusive Services, Heriot-Watt University.
Walras Centre (1999, 2000, 2001, 2002, 2004). Reports of Walras Centre. Paris: Editions Economica.
Zins, A., & Weill, L. (2016). The Determinants of Financial Inclusion in Africa. Review of Development Finance, 6, 46-57. https://doi.org/10.1016/j.rdf.2016.05.001