Financial inclusion in Sub-Saharan Africa: does the mobile money adoption matter?

The role of mobile money in enhancing financial inclusion has garnered attention in developing countries. Sub-Saharan Africa has realized a growing number of adults who own mobile phones and have subsequently registered mobile money accounts. However, there remains a lack of consensus on the effects of mobile money on financial inclusion. The current study utilized the latest Global Findex 2021 data for Sub-Saharan Africa to construct a composite index of financial inclusion at the individual level, incorporating indicators related to mobile money, to ascertain the true extent of financial inclusion. The fractional logistic regression model is employed to analyze the effect of mobile money on financial inclusion. The results indicate that mobile phone ownership and internet access, assumed to be proxies for mobile money, positively influence the likelihood of people being financially included. Other factors that have been found to affect financial inclusion positively include age, education, wage employment, and household socioeconomic status. The study recommends the expansion of mobile money infrastructures to reach marginalized groups. This is achieved by expanding mobile network coverage and agent networks in underserved and rural areas, enhancing access to financial services and products for the unbanked.