Financial inclusion in Africa: Does religion matter?

In Africa, where many people lack access to financial services, creating inclusive financial systems is a top priority. This study investigates how religion affects financial inclusion in African countries. Religion is important to many Africans and influences their values and economic behaviours. We analysed data from the World Bank Global Findex Database in 2021, focusing on 40 African countries. Using Stata to carry out the statistical analysis, we investigated factors like account ownership and barriers to financial inclusion. Our findings revealed statistically significant differences in account ownership especially in Muslim-majority and OIC member states. This therefore suggests that there is a link between religious beliefs and financial behaviours, especially in among individuals in OIC and Muslim-majority countries who cite religious reasons for not having an account more than those in non-OIC and Muslim-minority countries. We also observed that the presence of Islamic finance institutions positively impacts formal financial account ownership, indicating a potential avenue for enhancing financial inclusion in Muslim-majority and OIC member countries in Africa. Alongside this significance, we also found that even higher barriers such as lack of funds and trust in financial institutions remain in Africa. This highlights the need for tailored interventions to promote financial inclusion in Africa, considering factors like religion and socioeconomic status.