Conscientia Beam || conscientiabeam.com

Export to

Citations

Contact Us

For Marketing, Sales and Subscriptions Inquiries

2637 E Atlantic Blvd #43110
Pompano Beach, FL 33062

USA

Conference List

International Journal of Business, Economics and Management

January 2020, Volume 7, 1, pp 57-70

Financial Inclusion and Poverty Alleviation: The Contribution of Commercial Banks in West Africa

Prince Asare Vitenu-Sackey

Jiang Hongli

Prince Asare Vitenu-Sackey¹ ^,

Jiang Hongli¹

Jiangsu University, Zhenjiang, Jiangsu Province, China. ¹

on Google Scholar

on PubMed

Pages: 57-70

DOI: 10.18488/journal.62.2020.71.57.70

Article History:

Received: 14 November, 2019
Revised: 19 December, 2019
Accepted: 21 January, 2020
Published: 09 March, 2020

View Citation

227Views

Create Citation Alert

Abstract:

The study delves into financial inclusion and poverty alleviation with emphasis on the contribution of the commercial banks in West Africa from the period of 2004 to 2015. To achieve the objective of the study. In a panel of 10 West African countries, the study aimed at assessing the dynamic relationship that exists between financial inclusion and poverty alleviation. In order to achieve this objective, the study utilized some panel data methodologies such as unit root tests and cointegration tests to unravel the characteristics of the variables whether they statistically fit for further regression. The study employed dynamic panel data methodology to analyze the data to make statistical inference. The study found out that financial inclusion has positive impact on poverty alleviation but taking into consideration the number of commercial banks, it was evidenced that it has negative impact on poverty alleviation whiles number of ATMs and total amount of loans granted are insignificant in poverty alleviation. Government effectiveness as in the quality of policy formulation, implementation and the credibility of the government’s commitment to such policies has positive impact on poverty alleviation but regulatory quality which is the ability of the government to formulate and implement sound policies and regulations for private sector development has negative impact on poverty alleviation. The study recommends that commercial banks should widen their scope of operation to reach out to the poverty-prone areas. Moreover, governments should create the enabling environment and formulate and also implement sound policies which can boost poverty alleviation.

Contribution/ Originality
This study contributes in the existing literature on financial inclusion but presents a dynamic methodology by assessing the dynamic relationship that exists between financial inclusion and poverty alleviation in the region of West Africa.

Keywords:

Poverty alleviation, Financial inclusion, Commercial banks, West Africa, Dynamic panel data estimation.

Video:

Download Video

Download Audio

Reference:

Aina, S., & Onafowokan, O. (2014). The economy of financial inclusion in Nigeria: Theory, practice and policy.

Anderloni, L., & Carluccio, E. (2006). Access to bank accounts and payment services. In: L. Anderloni, E. Carluccio, and M. Braga, New Frontiers in Banking Services: Emerging Needs and Tailored Products for Untapped Markets. Berlin: Springer Verlag.

Apergis, N., & Payne, J. E. (2010). Natural gas consumption and economic growth: A panel investigation of 67 countries. Applied Energy, 87(8), 2759-2763. Available at: 10.1016/j.apenergy.2010.01.002.

Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58(2), 277-297. Available at: https://doi.org/10.2307/2297968.

Beck, T., Demirgüç-Kunt, A., & Levine, R. (2007). Finance, inequality and the poor. Journal of Economic Growth, 12(1), 27-49.

Buhaug, H., & Urdal, H. (2013). An urbanization bomb? Population growth and social disorder in cities. Global Environmental Change, 23(1), 1-10. Available at: https://doi.org/10.1016/j.gloenvcha.2012.10.016.

Burges, R., & Pande, R. (2005). Do rural banks matter? Evidence from the Indian social banking experiment. American Economic Review, 95(3), 780 - 788.

Chibba, M. (2008a). Poverty reduction in developing countries: No consensus but plenty of solutions. World Economics, 9(1), 197–200.

Chibba, M. (2008b). Monetary policy in small emerging market economies: The way forward. Macroeconomics and Finance in Emerging Market Economies, 1(2), 299–306.

Chibba, M. (2008c). Financial inclusion and development: Concepts, lessons learned and key Pillars. Mimeo. In: Chibba, M. (2009). Financial Inclusion, Poverty Reduction and the Millennium Development Goals. European Journal of Development Research, 21(2), 213-230. Available at: 10.1057/ejdr.2008.17.

Chibba, M. (2008d). Asia rising: Demise of the neo-liberal model of governance, economic management and public money. Public Money and Management, 28(6), 334–335.

Dumitrescu, E.-I., & Hurlin, C. (2012). Testing for Granger non-causality in heterogeneous panels. Economic Modelling, 29(4), 1450-1460. Available at: https://doi.org/10.1016/j.econmod.2012.02.014.

Edozien, E. C. (1975). Poverty, some issues in concept and theory in poverty in Nigeria. Ibadan: The National Economic Society.

European Union. (2008). Financial services provision and prevention of financial exclusion. Paper presented at the Conference "Financial Inclusion: Improving Access to Basic Financial Services" May, 2008: Retrieved from : http://ec.europa.eu/employment_social/spsi/events_en.htm#financial_exclusion .

Harley, T. W., Adetoso, J. A., & Adegboba, D. (2017). Role of financial inclusion in economic growth and poverty reduction in a developing economy. International Journal of Economics and Social Sciences, 7(5), 265 – 271.

Homer-Dixon, T., & Blitt, J. (1998). Ecoviolence: Links among environment, population, and security (pp. 121). Lanham, MD, United States: Rowman & Littlefield Publishers.

Homer-Dixon., T. F. (1999). Environment, scarcity and violence (pp. 125 – 130). Princeton, NJ, United States: Princeton University Press.

Honoham, B. (2007). Making finance work for Africa (pp. 71 -162): The World Bank Publication.

Honohan, P. (2004). Financial development, growth and poverty: How close are the links? In C. Goodhart, (Ed.), Financial Development and Economic Growth: Explaining the Links. London: Palgrave.

IFPRI. (2007). Taking action for the world’s poor and hungry people: A way forward. Washington DC: International Food Policy Research Institute (IFPRI).

Im, K. S., Pesaran, M. H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of Econometrics, 115(1), 53-74. Available at: https://doi.org/10.1016/s0304-4076(03)00092-7.

Inglesi-Lotz, R. (2016). The impact of renewable energy consumption to economic growth: A panel data application. Energy Economics, 53, 58-63. Available at: https://doi.org/10.1016/j.eneco.2015.01.003.

Jeanneney, S. G., & Kpador, K. (2008). Financial development and poverty reduction: Can there be benefit without a cost? IMF Working Paper No. WP/08/62.

Julilian, H., & Kirkpatrick, C. (2005). Does financial development contribute to poverty reduction? Journal of Development Studies, 41(4), 636-656. Available at: https://doi.org/10.1080/00220380500092754.

Kao, C., & Chiang, M. H. (2000). On the estimation and inference of a cointegrated regression in panel data. In: Baltagi, B., Ed., Nonstationary Panels, Panel Cointegration, and Dynamic Panels (Advances in Econometrics) (pp. 161-178). Amsterdam: JAI Press.

Kempson, E. (2006). Policy level response to financial exclusion in developing economies: Lessons for developing countries. Paper presented at the Paper for Access to Finance: Building Inclusive Financial Systems, May 30-31 2006, Washington DC: World Bank.

Kim, D.-W., Yu, J.-S., & Hassan, M. K. (2018). Financial inclusion and economic growth in OIC countries. Research in International Business and Finance, 43, 1-14. Available at: https://doi.org/10.1016/j.ribaf.2017.07.178.

Levin, A., Lin, C.-F., & Chu, C.-S. J. (2002). Unit root tests in panel data: Asymptotic and finite-sample properties. Journal of Econometrics, 108(1), 1-24. Available at: https://doi.org/10.1016/s0304-4076(01)00098-7.

Lingyun, H., & Xiaolu, Z. (2018). Impact of financial development on trade-embodied carbon dioxide emissions: Evidence from 30 provinces in China. Journal of Cleaner Production, 198, 721-736. Available at: https://doi.org/10.1016/j.jclepro.2018.07.021.

Mabogunje, A. C. (1975). Prolegomenon to urban poverty in Nigeria. Paper presented at the Proceedings of the 1975 Annual Conference of the Nigerian Economic Society.

Maddala, G. S., & Wu, S. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and statistics, 61(S1), 631-652. Available at: https://doi.org/10.1111/1468-0084.0610s1631.

Maji, I. K., & Sulaiman, C. (2019). Renewable energy consumption and economic growth nexus: A fresh evidence from West Africa. Energy Reports, 5, 384-392. Available at: https://doi.org/10.1016/j.egyr.2019.03.005.

Odhiambo, N. M. (2009). Finance-growth-poverty nexus in South Africa: A dynamic causality linkage. The Journal of Socio-Economics, 38(2), 320-325. Available at: https://doi.org/10.1016/j.socec.2008.12.006.

Odhiambo., N. M. (2010). Financial deepening and poverty reduction in Zambia: An empirical investigation. International Journal of Social Economics, 37(1), 41 - 53.

Ogwumike, F. (1991). A basic needs-oriented approach to the measurement of poverty in Nigeria. The Nigerian Journal of Economic and Social Studies, 33(2), 105-120.

Olayide, S. O., & Essang, S. M. (1975). Aspect of rural poverty in Nigeria: Implication for policy. Paper presented at the Proceedings of the 1975 annual Conference of the Nigerian Economic Society.

Pedroni, P. (1999). Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxford Bulletin of Economics and statistics, 61(S1), 653-670. Available at: https://doi.org/10.1111/1468-0084.61.s1.14.

Pedroni, P. (2004). Panel cointegration: Asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis. Econometric Theory, 20(3), 597-625. Available at: https://doi.org/10.1017/s0266466604203073.

Ramji, M. (2009). Financial inclusion in Gulbarga: Finding usage in access. Centre for Micro Finance Working Paper Series No. 26, New Delhi: India, Institute for Financial Management and Research.

Sinclair, S. (2001). Financial exclusion: A introductory survey. Edinburgh: Heriot Watt University Centre for Research into Socially Inclusive Services.

World Bank. (2001). World development report: Attacking poverty. New York: Oxford University Press.

World Bank. (2012). World development indicators. Washington DC: World Bank.