Financial innovation as a moderator: Analyzing the interplay between financial inclusion, poverty and economic growth in Africa
Keywords:
Financial innovation, financial inclusion, poverty, economic growth, fintechAbstract
This study examines the moderating influence of financial innovation on the relationship between economic growth, poverty, and financial inclusion in Africa. The research investigates the ways in which financial innovation promotes economic development, reduces poverty, and enhances inclusion, in light of the transformative potential of financial services. Using panel data from 41 African countries, which were selected through a convenience sampling technique from a total of 54 nations, a quantitative research approach was implemented. The data was obtained from the World Development Indicators (WDI), World Governance Indicators (WGI), and the International Monetary Fund (IMF). In order to mitigate endogeneity concerns and guarantee reliable outcomes, the Generalized Method of Moments (GMM) estimation technique was employed. The results indicate that poverty impedes economic growth, while financial inclusion has a beneficial effect. These relationships are substantially moderated by financial innovation, which enhances the effects of financial inclusion and mitigates the negative impact of poverty. Economic outcomes are also significantly influenced by control variables, including education, urbanization, infrastructure development, and regulatory quality. The research posits that policymakers should cultivate a regulatory environment that promotes financial innovation while simultaneously guaranteeing financial stability. It is imperative to invest in financial literacy and digital infrastructure in order to enhance financial inclusion and alleviate destitution. Future research should investigate the long-term consequences of financial innovation on income inequality and perform comparative analyses across regions.
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Copyright (c) 2025 Kwaku Sarbeng-Adjebeng Akrofi, Evans O. N. D Ocansey, Felix Oppong Asamoah
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