Do remittances spur financial inclusion in Africa? A multi-dimensional approach
Résumé
The objective of this paper is to examine the effect of migrant remittances on financial inclusion in Africa using a multi-dimensional approach. Our sample consists of 21 countries over a period from 2004 to 2018. We adopted a Pooled Mean Group (PMG) to capture the short- and long-term dynamics of the impact of migrant remittances on financial inclusion. From this work, the following results have emerged. (i) Migrant remittances have a positive long-term effect on financial inclusion. (ii) Migrant remittances have a positive long-term effect on access to financial services. Specifically, the remittances have a negative effect in the short term and a positive effect in the long term on the number of banking branches. (iii) the remittances have a negative long-term effect on the use of financial services. More specifically, the remittances increase the number of depositaries with financial institutions in the long term but has a negative effect on the number of borrowings. These results are robust using a GMM system. Several implications flow from these results. To better benefit from remittances, it would be appropriate for financial institutions to offer ranges of products that are adapted to the recipient households in the use of financial services.