- Title
- The relationship between financial inclusion and economic well being in South Africa
- Creator
- Genukile, Lwazi
- Description
- Financial inclusion has been regarded as a solution to the problem of poor economic well-being by providing quality access to financial services. It also contributes to resource and income distribution and boosts consumption and investment, which lead to an overall stimulation in economic well-being. The aim of the study was to examine the relationship between financial inclusion and economic well-being in South Africa. To achieve this, the study examined the long-run and short-run relationships between financial inclusion and economic well-being in South Africa using quarterly time-series data from 1992 to 2020. The data was obtained from World Bank economic indicators and a SARB statistics enquiry. The study used the Autoregressive Distributed lag bound test and the Error Correction Model to examine the long-run and short-run relationships of the variables. The Granger causality test was conducted to identify the directional causality amongst the variables. The variables used in this study were GDP per capita (GDPPC) as a measure of economic well-being, which is the dependent variable, whereas bank account holders, access to credit, and insurance were used as major explanatory variables. The study discovered that in the long-run, bank account holders and access to credit have a positive significant relationship with GDP per capita, whilst inflation rate indicated a negative relationship with GDP per capita. However, in the short-run results, the study revealed that insurance and inflation rate have a positive relationship with GDP per capita, whereas access to credit presented a negative relationship with GDP per capita. The Granger causality test only indicated a bi-directional causality between inflation rate and GDP per capita. A diagnostic test was conducted in the model and the results revealed that all instruments used in the model are valid and reliable. Based on these findings, the existence of a positive relationship between financial inclusion and economic well-being can be confirmed, hence validating the hypothesis in South Africa. This study recommends that government and policy-makers should focus more on accelerating the expansion of access to credit and insurance at lower transactional costs and management fees, especially for the poor and most vulnerable population in the country. Furthermore, the access to credit, insurance and economic well-being relationship should take place in an inflation framework-sensitive environment.
- Description
- Thesis (Masters) -- Faculty of Economics and Financial Sciences, 2023
- Date
- 2023-00
- Subject
- Commerce in economics
- Type
- Masters theses, text
- Identifier
- http://hdl.handle.net/11260/10053
- Identifier
- vital:74934
- Format
- computer, online resource, application/pdf, 1 online resource (100 pages), pdf
- Publisher
- Walter Sisulu University, Faculty of Economics and Financial Sciences
- Language
- English
- Rights
- Faculty of Commerce and Administration, All Rights Reserved, Open Access
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| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details | SOURCE1 | Genukile, L Final Masters' document 2024.pdf | 2 MB | Adobe Acrobat PDF | View Details |