ACCESS TO FINANCE AND RATE OF POVERTY IN SUB-SAHARAN AFRICA
Taiwo Wakilat Bello1 & Opeyeni Nathaniel Oladunjoye*2
1Department of Economics, Obafemi Awolowo University, Ile-Ife, Nigeria
2Department of Economics, Obafemi Awolowo University, Ile-Ife, Nigeria
The challenge of high rate of poverty and how to address it continues to be the most persistent discuss in international development debates. In the heart of most academic researchers and policy makers are question on what makes sub-Saharan Africa (SSA) the poorest region in the world and what can be done to rescue the populace from the vicious cycle of poverty. This study examined the effect of access to finance and poverty level in SSA. Secondary data on household per capita consumption, number of commercial bank branches per one hundred thousand adults, number of automated teller machines (ATMs) per one hundred thousand adults, number of depositors per one thousand adults, number of borrowers from commercial banks per one thousand adults, per capita income, percentage of dependants over the active working population, trade openness, real interest rate, government expenditure as well as GINI index covering 2004-2018 were sourced from the World Development Indicators (WDI) of the World Bank (2019) and Global Financial Development (2019). Data collected were analysed using econometric method of Panel Ordinary Least Squares. The study found that number of commercial bank branches per 100,000 adults, number of ATMs per 100,000 adults and the number of depositors account per 1000 adults had positive and significant impact on poverty level (household final per capita consumption-expenditure). Whereas, borrowers from banks per 1000 adults had positive but insignificant impact on poverty level. The study concluded that overall access to finance positively impacted the level of poverty in SSA. Hence, access to finance can be used as tool for improving the welfare of the people and in turn reduce the rate of poverty in SSA.
Key words:Access to Finance, Poverty, Panel Ordinary Least Squares, sub-Saharan Africa