How do financial inclusion and bank stability explain agricultural productivity in Sub-Saharan Africa?

Abstract

Purpose

This study aims to examine the impact of financial inclusion and bank stability on agricultural productivity in Sub-Saharan Africa (SSA).

Design/methodology/approach

The study used 38 countries in the SSA with data spanning between 2004 and 2021. The data were analyzed using the two-step system generalized method of moments (GMM) and the panel-corrected standard error (PCSE) model.

Findings

The study found a positive effect of financial inclusion and bank stability on agricultural productivity. The study also discovered that while the access component of financial inclusion has a negative influence on agricultural productivity, the usage dimension has a positive impact.

Research limitations/implications

The study suggests to policymakers that an inclusive and stable financial system improves agricultural productivity. The findings recommend that policymakers should empower farmers to leverage financial inclusion.

Originality/value

This study provides insightful discussion on the impact of financial inclusion and its various dimensions and bank stability on agricultural productivity in SSA.

Citation

Bekoe, I.K., Abor, J. and Sekyi, S. (2024), "How do financial inclusion and bank stability explain agricultural productivity in Sub-Saharan Africa?", Journal of Economic Studies, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JES-09-2023-0526