Inclusive Education and Financial Development in Africa

The study assesses the effect of inclusive education on the level of financial development in 50 African countries from 2003 to 2020. The study adopts the two-step system GMM as a strategy. The study employs the primary, secondary and tertiary enrolments at the gender parity index as indicators of inclusive education. The study employed inclusive measures of financial development in aspects of financial efficiency measured by the ratio of banks’ credit on deposits, financial depth indicated by liquid liability, banking size indicated by banks’ assets, and the growth in the banking sector’s activities indicated by private domestic credit from financial institutions. The results of the study show that secondary and tertiary enrolments significantly influence financial efficiency, depth, banking size and growth in banking activities, indicating a positive effect of inclusive education on inclusive financial development in Africa. The study recommends policymakers invest more in the knowledge economy to promote digital and mobile banking, which increases the rate of financial inclusion and development in most African countries. Studies have shown that the rate of financial inclusion in Africa has increased in the last two decades because of mobile banking and internet penetration, which can be enhanced through education.