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The role of education and financial inclusion in Africa : the case of selected African countries

Mzobe, Nomfundo (2015-12)

Thesis (M.Phil)--Stellenbosch University, 2015.


ENGLISH ABSTRACT: The importance of financial inclusion to a country in promoting inclusive growth cannot be over emphasised, but the role of education in fostering financial inclusion has not been well established in empirical literature. This is particular severe in Africa where only 34 per cent of the adult population have access to a bank account and about 14.8 per cent of the population aged 15 and above have no schooling. Therefore, the major objective of this study was to examine the relationship between financial inclusion and education levels in Africa. Financial inclusion indicators captured in the study are account ownership, savings and health insurance. Educational attainment was disaggregated into ‘primary or less’ and ‘secondary or more’ years of schooling, while financial inclusion data was sourced from the World Bank Global Financial Index. The empirical results pointed out that both measures of education, primary as well as secondary, have a significant influence on financial inclusion. After controlling for other factors that equally influence financial inclusion, education has a positive and statistically significant effect on financial inclusion in all the models estimated. The effect of education on account ownership, savings and health insurance is statistically significant at one per cent level. GDP per capita has a statistically positive effect on financial inclusion, and inflation, weak law, age dependency and overhead costs have a negative and statistically significant effect on financial inclusion in all models estimated. The results emphasised the importance of macroeconomic stability and having a good institutional framework in achieving financial inclusion in Africa. This, therefore, suggested that one reason why African countries have experienced less financial inclusion was poor institutional frameworks as well as macroeconomic instability.

AFRIKAANSE OPSOMMING: Geen opsomming beskikbaar

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