The regulatory environment, access innovations and financial inclusiveness: perspective from emerging economies

This study evaluates the effect of the regulatory environment and access innovations on the pace of financial inclusiveness among emerging economies of Sub-Saharan Africa (SSA). Data for the inquiry were compiled from 28 countries in SSA from 2004 to 2020. Empirical estimates were conducted using the two-step system generalized method of moments (TS-SGMM) methodology. Results from the estimates indicate that an improved regulatory environment promotes financial inclusion among economies in the sub-region of SSA. The study also finds that Access innovations positively influence the process of financial inclusion. Additionally, reported empirical estimates show that political instability negatively moderates the relationship between examined regulatory variables (regulatory quality, government effectiveness, and rule of law), access innovations, and financial inclusion among economies in the sub-region. Following these findings, we recommend the promotion and support for efficient regulatory structures and policy measures that foster stable political environment for economies in the sub-region to promote financial inclusiveness. Additionally, the study supports the development of financial sector policies, which makes it easier to adopt evolving technologies that promote activities of the financial system to foster financial inclusiveness.