Financial development, economic freedom, innovative facilities, economic wellbeing and Inclusive finance in Sub-Saharan Africa.

Abstract

This thesis presents three empirical papers that seek to improve inclusive finance and economic wellbeing in Sub-Saharan Africa (SSA). Employing a generalized method of moment for 30 SSA countries: The first paper concerned itself with the role of regulation in the relationship between financial development and inclusive finance. It found a significant positive direct effect of financial development on inclusive finance and a significant positive direct influence of regulation on financial inclusion, but found a significant positive role of regulation in the relationship between financial development and inclusive finance up to a threshold of 6.3354, above which regulation negatively modulates. This suggests that when regulation exceeds that threshold of 6.3354 in SSA, it subsequently hinders the financial sector from rendering enough services that can help improve inclusive finance. Hence, policymakers should always check the mean of their economies' regulations against the threshold of 6.3354 before deciding whether to be more restrictive or not. Also, Paper two sheds light on the collaborative role of innovative facilities and economic freedom in inclusive finance. The study recorded that improving economic freedom promotes financial inclusion while expanding innovative facilities in SSA inhibits it. Again, innovative facilities improve the impact of economic freedom on inclusive finance in SSA but subsequently diminish the effect of economic freedom on inclusive finance after certain thresholds. This implies that in SSA, innovative facilities-induced freedom-inclusive finance is relevant only when it has not covered certain thresholds because undesirable results are revealed after the thresholds. Thus, technical and financial knowledge should be enhanced in addition to lowering the cost of using innovative facilities to access financial services to prevent negative influence after the thresholds. Paper three assessed the complementary role of economic freedom on the influence of inclusive finance on economic wellbeing. The findings revealed that financial inclusion enhances the wellbeing of residents, economic freedom improves the wellbeing of the populace and a free environment maximizes the role of inclusive finance on economic wellbeing in SSA. Hence, less restrictions are recommended to be adopted by policymakers in SSA when it comes to enhancing financial inclusion's influence on economic wellbeing.