ILOGHO Simon Osiregbemhe, KLINGELHÖFER Heinz Eckart
Abstract
This paper examines the impact of inclusive finance on carbon emissions in 13 Southern African Development Community (SADC) countries using data from 2002 to 2022. Financial inclusion was proxied by Automated Teller Machine (ATM) and commercial accessibility as well as personal remittance received. A Panel Estimated Generalised Least Square regression was employed, as it was sufficiently robust. Two models were tested: the first one to examine the impact of the current year’s financial inclusion facilities on present years carbon emissions, while the second one to examine the impact of the previous year’s financial inclusion facilities on present years carbon emissions. The results indicate that only higher accessibility to ATMs in the prior year reduce carbon emissions per capita in the current year. Furthermore, growing access to commercial bank branches in the previous year may increase carbon emissions per capita for the current year. Therefore, because financial inclusion impacts carbon emissions per capita, more available ATMs may not only be beneficial from a financial inclusion point of view, but also from an environmental perspective. In addition, since a more traditional financial inclusion proxy (commercial bank branches) leads to increased carbon emission, while a rather innovative financial inclusion proxy (ATMs) reduces them, this indicates that more innovative ways of dispensing financial services or products to the public could be encouraged in the SADC region.