Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/244181 
Year of Publication: 
2021
Series/Report no.: 
AGDI Working Paper No. WP/21/006
Publisher: 
African Governance and Development Institute (AGDI), Yaoundé
Abstract: 
This study investigates direct and indirect linkages between financial development and inclusive human development in data panels for African countries. It employs a battery of estimation techniques, notably: Two-Stage Least Squares, Fixed Effects, Generalized Method of Moments and Tobit regressions. The dependent variable is the inequality adjusted human development index. All dimensions of the Financial Development and Structure Database (FDSD) of the World Bank are considered. The main finding is that financial dynamics of depth, activity and size improve inclusive human development, whereas the inability of banks to transform mobilized deposits into credit for financial access negatively affects inclusive human development. Policies should be tailored to improve mechanisms by which credit facilities can be provided to both households and business operators. Surplus liquidity issues resulting from the inability of banks to transform mobilized deposits into credit can be resolved by enhancing the introduction of information sharing offices (like public credit registries and private credit bureaus) that would reduce information asymmetry between lenders and borrowers. This study complements the extant literature by assessing the nexus between financial development and inclusive human development in Africa.
Subjects: 
Banking
human development
Africa
JEL: 
E00
G20
I00
O10
Document Type: 
Working Paper

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