Digital finance and poverty in selected Sub-Saharan Countries

Since the 21st century, digital finance has emerged as a critical enabler and an excellent tool for meeting the UN 2030 Sustainable Development Goals (SDGs) through increasing financial inclusion and poverty reduction. The objective of achieving universal financial access by 2030 has led to recognising that financial inclusion has a significant role in economic growth and poverty eradication. The literature demonstrates that access to finance can affect poverty through access to credit, enabling savings, thereby facilitating intertemporal consumption smoothing. Digital finance is key to unlocking financial inclusion, particularly in developing countries. Building capacity in digital payments is one of the best ways to ensure a faster, better, and more cost-effective way to access financial services. The gender gap in developing countries states that (59% of men were reported to have a bank account in 2014, while 50% of women only had a bank account). Some groups, including women and the rural poor, are financially excluded compared to others. This study applied panel data regression analysis and structural equation modelling to investigate the nature of digital finance, its relationship with poverty and the transmission mechanism from digital finance to poverty in selected Sub-Saharan Countries. The results indicate that remittance is one of the most significant determinants of the use of digital finance in the Sub-Saharan region compared to other determinants of use for digital finance. Regarding the transmission mechanism between digital finance and poverty, the path analysis results suggest that the channel for remittance in the transmission mechanism has a more substantial impact on reducing poverty than savings in the Sub-Saharan region. The study recommends that remittance is essential, but savings are not critical in this digital age. This study contributed to literature by identifying the transmission mechanism between digital finance and poverty. This is beneficial to researchers and policymakers . It provides policy practitioners with a reference point on a model to build upon towards providing solutions to the problem, Sub-Saharan Countries encounter on delivering sustainable and broad-based economic growth. The study concludes by proposing that digital finance, particularly mobile money presents an excellent opportunity to increase access to finance and reduce poverty.Thesis (PhD) -- Faculty of Management and Commerce, 202