An empirical analysis of the impact of banking regulations on sustainable financial inclusion in the CEMAC region

Based on a panel analysis of six countries over the period 2004-2018, this study examines the impact of financial regulation on sustainable financial inclusion (FI) in the Central African Economic and Monetary Community (CEMAC) region. Using different approaches to estimate FI, we find that banking regulation has a positive impact on FI. In particular, our findings suggest that regulations for monitoring entry into the financial sector, external reporting and audits, and deposit insurance contribute sustainably to an increase in FI. In addition, banking regulations help the region to attract foreign direct investment and boost economic growth. An important policy implication of this paper is that CEMAC regulators should enhance synergy with mobile telephone network providers to promote digital FI, as it offers a low-cost option for promoting FI, especially for people living in areas underserved by mainstream financial institutions.