Resolving Financial Inclusion Puzzle: A Comparative Study of 46 African Countries

Financial inclusion in Africa presents a puzzle: while digital and physical access has expanded dramatically, the usage of financial services has not improved in many countries. The purpose of this study is to compare the performance of 46 African countries towards financial inclusion; to achieve this, a composite Financial Inclusion Index (FII) has been created across four Global Findex waves (2011, 2014, 2017 and 2021). Apart from comparing these countries' performance on financial inclusion, this study also used decomposition analysis to examine whether a country's financial services lack access, quality, usage, or other dimensions. The literature review section also highlights that this study is a unique piece of work, as no existing study has focused on decomposing the gap in the financial inclusion index using access, usage, and quality as indicators on the African continent. The study identified three distinct growth trajectories as Leaders, Stalled, and Breakout Performers and shows how internal dimension conflicts explain stagnation in nations. The study will help policymakers decide whether their priority should be expanding infrastructure, activating usage through digital payments, or strengthening governance in the context of a particular country on the African continent.