About the Project 

It is well known that financial institutions and markets foster the flow of information about resource availability, especially the required financial resources for supporting economic growth. Previous research also shows that financial deepening, demonstrated by increased availability of a wide range of financial choices, is a core element of financial development. However, financial development alone cannot ensure financial inclusion – some households and enterprises are unable to fully participate in the financial sector; globally, some countries may not access international capital markets.

Moreover, the channels for financial development to promote inclusive finance are not clear and are not well studied. While new technology, such as mobile money transfer systems, has strengthened financial inclusion, gaps in access to finance as well as gaps in the development of financial systems seem to be getting wider following the 2007-09 global financial crisis. Overall, the current consensus is that there is urgent need for research on inclusive finance and its potential contribution to lifting low income countries to the level of their medium income peers.

Led by Professor Victor Murinde at SOAS University of London, a consortium of partners is collaborating on this research project on inclusive finance, funded under the ESRC-FCDO Growth Research programme (DEGRP) Call 3 (ES/N013344/2). The consortium is international with a focus on the North-South partnership, and it includes the UK (SOAS University of London; University of Birmingham, Institute of Development Studies at the University of Sussex; Loughborough University; the Overseas Development Institute; and the University of Nottingham), the Netherlands (CIBIF, Faculty of Economics and Business, the University of Groningen), North America (Université Laval in Québec, Canada and Columbia in the US) and, crucially, Africa (the University of Ghana-Legon; and the African Economic Research Consortium (AERC; Pan African, headquartered in Nairobi).

The research project focuses on delivering inclusive financial development, with a focus on low income countries in Africa.  Professor Victor Murinde, the Principal Investigator, said “the project will: deliver rigorous, high quality research to support financial inclusion policies; develop innovative financial products in collaboration with households, banks, and the private sector; involve collaborative research to enhance methodologies and data for the promotion of inclusive finance; and engage with policy-makers to provide research-based advice on financial inclusion in Africa”.

Professor Murinde continued, “this research is vital for embedding financial inclusion in African economies, and aims ultimately to have a significant impact on livelihoods”.

 “The conversation in Africa has now shifted, beyond the growth renaissance the region has witnessed over the years, to that of inclusive growth that is sustainable.  Inclusive finance is at the center of this transformation, and hence the project is very timely.  AERC is privileged to be a partner, since the project pervades its entire capacity building framework inclusive of research, collaborative graduate training, policy outreach, and vast network”, says Professor Lemma W. Senbet, AERC Executive Director (2013-2018) and the William E. Mayer Chair Professor of Finance, University of Maryland.

To be delivered over a four year period until March 2021, the research component of the project addresses three core questions:

• How can institutional frameworks support inclusive financial development?

• What role do private and public capital inflows play in domestic financial inclusion in Africa?

• How can private and public institutions in Africa be a catalyst and channel for technological diffusion and financial inclusion?

The project’s other important dimensions pertain to (a) capacity building of early career researchers in low income countries, with a focus on Africa, to conduct policy-oriented research of global standards, (b) to influence policy dialogue and formulation among senior policy decision makers as well as non-state actors, such as the private sector.

Research Team

This project is led by Professor Victor Murinde – as PI and includes Co-Is from:

SOAS University of London, African Economic Research Consortium (AERC), University of Ghana, University of Groningen, Institute of Development Studies (IDS), FSA Université Laval, Loughborough University, University of Nottingham, and Overseas Development Institute (ODI)

International Advisory Group

The International Advisory Group (IAG) of the Research Project on ‘Inclusive Finance’ consists of international eminent persons from across four types of stakeholders:

• Policy makers with first rate experience relating to financial sector reforms, in particular, and broad economic reforms, in general;

• Private sector practitioners who have been (or are currently) involved in business transformation that aims to enhance livelihoods in low income African countries

• Civil society and other third sector actors who are actively involved in monitoring the interplay between international and local developments that shape policy and practice in financial inclusion

• Top researchers who have the experience or are currently involved in cutting-edge work in economics, finance or interdisciplinary investigations