Determinants and Drivers of Financial Inclusion in the West African Economic and Monetary Union (WAEMU): A Multidimensional Analysis

Abstract

Using data from the Global Findex surveys conducted in 2017 and 2021, this study assesses the extent and determinants of multidimensional financial inclusion in the West African Economic and Monetary Union (WAEMU) over these two periods. A multidimensional financial inclusion index was constructed using the methodology of Alkire and Foster (2011). To analyse the determinants and drivers of multidimensional financial inclusion, a probit model and Fairlie's (2005) decomposition were employed. Although the results indicate an increase in the level of multidimensional financial inclusion in the WAEMU, the rate of multidimensional financial exclusion remains high. This improvement in financial inclusion between the two periods can be attributed to changes in individuals' socio-economic characteristics. The findings also reveal significant disparities in financial inclusion between men and women, as well as among WAEMU member countries. In addition, significant relationships were observed between individuals' socio-economic characteristics and their multidimensional financial inclusion status. Policies aimed at promoting better economic opportunities and improving education levels are essential for increasing the rate of financial inclusion in the WAEMU.