Financial inclusion: Measurement, Determinant and Effect

This study conducts a comparative analysis of the factors affecting financial inclusion in Kenya and Ethiopia at macro and micro levels. A generalized linear model is used to examine the determinants of and barriers to financial inclusion using the 2017 Global Findex Database, whereas a descriptive analysis is used to explore their macro-level differences. Kenya has a higher level of financial inclusion than Ethiopia. Differences in financial liberalization policy, gross domestic product, percentage of rural population, and mobile money service expansion are some macro-level differences that explain this variation. Differences in literacy rates and means of receiving payments such as government transfers explain some of the micro-level variations between the two countries. In addition, gender, age, employment status, and owning a mobile phone have significant and positive effects on financial inclusion. However, lack of documentation, lack of trust, and lack of money are significant barriers to financial inclusion. The area where it was collected was in Sidama region, Ethiopia. The respondents were business owners who pay value added tax and turn over tax. And the abbreviations stand for HZ for Hawassa Zuria district, BO for Boricha district and LA for Loka Abaya. All these districts are located in the Sidama region.