Financial Inclusion, Fintech, and Income Inequality in Africa
Abstract
:1. Introduction
2. Literature Review
3. Materials and Methods
3.1. Model Specification
3.2. Data
4. Empirical Results
5. Concluding Remark
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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Variable | Short Definition | Source |
---|---|---|
Gini | Gini disposable | The Standardized World Income Inequality Database (SWIID) |
Account Ownership | Financial institution account (% age 15+) | Global Findex |
Fintech | Made digital payments in the past year (% age 15+) | Global Findex |
Savings | Saved at a financial institution (% age 15+) | Global Findex |
Borrowing | Borrowed from a financial institution (% age 15+) | Global Findex |
GDP Growth | GDP per capita growth (annual %) | World Development Indicators |
Schooling | School enrollment, primary and secondary (gross), gender parity index (GPI) | World Development Indicators |
Trade | Trade (% of GDP) | World Development Indicators |
Gov’t Expenditure | General government final consumption expenditure (% of GDP) | World Development Indicators |
Inflation | Inflation, GDP deflator (annual %) | World Development Indicators |
Population | Population growth (annual %) | World Development Indicators |
Institutional Quality | Control of corruption, political stability, government effectiveness | World Governance Indicator (WGI) |
Variable | Obs | Mean | Std. Dev. | Min | Max | ||||||
---|---|---|---|---|---|---|---|---|---|---|---|
[26] | Gini | 91 | 45.178 | 7.221 | 33.3 | 65.9 | |||||
[27] | Account Owners | 102 | 0.264 | 0.188 | 0.015 | 0.895 | |||||
[29] | Fintech | 69 | 0.243 | 0.171 | 0.022 | 0.764 | |||||
[2] | Savings | 102 | 0.118 | 0.084 | 0.006 | 0.355 | |||||
[19] | Borrowing | 102 | 0.065 | 0.045 | 0.013 | 0.284 | |||||
[3] | GDP Growth | 101 | 2.505 | 3.689 | −6.809 | 24.976 | |||||
[43] | Schooling | 61 | 0.937 | 0.106 | 0.630 | 1.071 | |||||
[23] | Trade | 96 | 69.531 | 26.963 | 1.377 | 149.01 | |||||
[44] | Gov’t Expen | 94 | 14.584 | 6.324 | 4.325 | 39.690 | |||||
[22] | Inflation | 101 | 7.755 | 9.699 | −11.876 | 60.987 | |||||
[38] | Population | 102 | 2.440 | 0.878 | −0.027 | 3.899 | |||||
[26] | [27] | [29] | [2] | [19] | [3] | [43] | [23] | [44] | [22] | [38] | |
[26] | 1 | ||||||||||
[27] | 0.388 * | 1 | |||||||||
[29] | 0.478 * | 0.705 * | 1 | ||||||||
[2] | 0.385 * | 0.877 * | 0.621 * | 1 | |||||||
[19] | −0.045 | 0.551 * | 0.455 * | 0.457 * | 1 | ||||||
[3] | −0.104 | 0.159 | −0.102 | 0.122 | 0.101 | 1 | |||||
[43] | 0.023 | 0.368 * | 0.311 * | 0.291* | 0.421 * | 0.161 | 1 | ||||
[23] | 0.147 | 0.177 | −0.031 | 0.056 | 0.033 | 0.024 | 0.023 | 1 | |||
[44] | 0.396 * | 0.200 | 0.144 | 0.108 | −0.086 | −0.099 | 0.273 * | 0.461 * | 1 | ||
[22] | 0.025 | −0.041 | −0.025 | −0.034 | −0.053 | 0.013 | −0.013 | −0.111 | −0.155 | 1 | |
[38] | −0.085 | −0.531 * | −0.271 * | −0.303 * | −0.489 * | −0.216 * | −0.511 * | −0.397 * | −0.352 * | 0.088 | 1 |
Dependent Variables | Financial Inclusion | Fintech | Financial Inclusion | Fintech | Financial Inclusion | Fintech | |||
---|---|---|---|---|---|---|---|---|---|
I. | II. | III. | IV. | V. | VI. | ||||
Indep Var | Political Stability | 0.076 * | 0.047 | Control of Corruption | 0.176 *** | 0.120 * | Government Effectiveness | 0.230 *** | 0.138 ** |
(0.032) | (0.037) | (0.046) | (0.048) | (0.036) | (0.043) | ||||
Observation | 67 | 44 | 67 | 44 | 67 | 44 | |||
R-Squared | 0.36 | 0.11 | 0.434 | 0.205 | 0.588 | 0.277 |
Dependent Variables | Financial Inclusion | Savings | Borrowing | Financial Inclusion | Savings | Borrowing |
---|---|---|---|---|---|---|
OLS | 2sls | |||||
I. | II. | III. | IV. | V. | VI. | |
Fintech | 0.817 *** | 0.331 *** | 0.0226 | 1.455 *** | 0.655 *** | 0.0487 |
(0.132) | (0.079) | (0.039) | (0.338) | (0.192) | (0.074) | |
GDP PC Growth | −0.002 | −0.002 | 0.004 * | - | - | - |
(0.007) | (0.004) | (0.002) | ||||
Schooling | −0.138 | 0.0155 | 0.0234 | −0.24 | −0.039 | 0.037 |
−0.197 | −0.118 | −0.0596 | −0.231 | (0.131) | (0.057) | |
Trade | −0.005 | −0.003 | −0.001 | −0.001 | −0.001 | −0.0006 |
(0.008) | (0.005) | (0.002) | (0.001) | (0.005) | (0.002) | |
Government Expen | −0.004 | −0.009 | −0.001 | 0.007 | −0.005 | −0.001 * |
(0.003) | (0.002) | (0.009) | (0.003) | (0.002) | (0.008) | |
Inflation | −0.001 | −0.003 | −0.005 | 0.005 | 0.0005 | −0.007 |
(0.002) | (0.001) | (0.005) | (0.002) | (0.001) | (0.005) | |
Population Growth | −0.111 *** | −0.0231 | −0.0411 *** | −0.067 | −0.008 | −0.039 *** |
(0.027) | (0.016) | (0.008) | (0.037) | (0.021) | (0.008) | |
Constant | 0.539 * | 0.122 | 0.156 * | 0.36 | 0.0312 | 0.149 * |
(0.254) | (0.152) | (0.076) | (0.308) | (0.174) | (0.076) | |
N | 44 | 44 | 44 | 44 | 44 | 44 |
adj. R-sq | 0.703 | 0.389 | 0.584 | 0.521 | 0.122 | 0.544 |
Sargan Statistics | - | - | - | 0.6853 | 0.566 | 0.0621 |
Dependent Variable: log[Gini Disposable] | ||||||||
---|---|---|---|---|---|---|---|---|
OLS | 2sls | |||||||
I. | II. | III. | IV. | V. | VI. | VII. | VIII. | |
Financial Inclusion | 0.284 *** | 0.332 *** | −0.043 | 0.336 * | −0.0153 | |||
(0.078) | (0.095) | (0.189) | (0.142) | (0.294) | ||||
Fintech | 0.440 *** | 0.578 *** | 0.616 ** | 0.746 ** | 0.755 | |||
(0.107) | (0.140) | (0.219) | (0.275) | (0.492) | ||||
GDP PC Growth | −0.001 | −0.021 | −0.021 | |||||
(0.006) | (0.011) | (0.012) | ||||||
Schooling | −0.088 | −0.231 | −0.242 | −0.093 | −0.229 | −0.248 | ||
(0.190) | (0.239) | (0.248) | (0.176) | (0.295) | (0.252) | |||
Trade | −0.007 | −0.008 | −0.008 | −0.007 | −0.005 | −0.005 | ||
(0.007) | (0.001) | (0.001) | (0.006) | (0.001) | (0.001) | |||
Government Expen | 0.006 * | 0.002 | 0.002 | 0.007 ** | 0.005 | 0.005 | ||
(0.003) | (0.004) | (0.004) | (0.002) | (0.003) | (0.003) | |||
Inflation | 0.004 | −0.005 | −0.005 | 0.042 | 0.043 | 0.041 | ||
(0.002) | (0.002) | (0.003) | (0.027) | (0.035) | (0.037) | |||
Population Growth | 0.045 | 0.020 | 0.015 | 0.004 | 0.001 | 0.001 | ||
(0.025) | (0.031) | (0.037) | (0.002) | (0.002) | (0.003) | |||
Constant | 3.633 *** | 3.896 *** | 3.926 *** | 3.628 *** | 3.688 *** | 3.712 *** | ||
91 | (0.243) | (0.310) | (0.341) | (0.234) | (0.319) | (0.319) | ||
N | 0.119 | 58 | 59 | 36 | 36 | 59 | 35 | 36 |
adj. R-sq | - | 0.219 | 0.148 | 0.311 | 0.287 | 0.164 | 0.191 | 0.19 |
Sargan Statistics | - | - | - | - | 0.8099 | 0.0961 | 0.0637 |
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Ashenafi, B.B.; Dong, Y. Financial Inclusion, Fintech, and Income Inequality in Africa. FinTech 2022, 1, 376-387. https://doi.org/10.3390/fintech1040028
Ashenafi BB, Dong Y. Financial Inclusion, Fintech, and Income Inequality in Africa. FinTech. 2022; 1(4):376-387. https://doi.org/10.3390/fintech1040028
Chicago/Turabian StyleAshenafi, Biruk Birhanu, and Yan Dong. 2022. "Financial Inclusion, Fintech, and Income Inequality in Africa" FinTech 1, no. 4: 376-387. https://doi.org/10.3390/fintech1040028