Financial Inclusion and Banks Performance: An Empirical Study of 10 West African Countries Using Panel Cointegration FMOLS Regression Methodology

Abstract

The paper assesses the effect of financial inclusion on banks performance in West African countries. To be able to assess the long run effect of financial inclusion on banks performance, the study employed panel cointegration methodology thus fully modified ordinary least square model to estimate the long run impact on banks performance. The study concluded that financial inclusion has positive effect on banks performance with an enticing results showing that financial inclusion increases banks performance in low gdp per capita countries which signals that banks should increase their presence and provide services to those countries. The study recommends the utilization of multi-factors of financial inclusion measure to ensure precise and appropriate way to measure multilateral financial inclusion level.

Keywords: Financial inclusion, Banks performance, Fully modified ordinary least square, West Africa

DOI: 10.7176/EJBM/11-21-05

Publication date:July 31^st 2019