Financial inclusion and its impact on economic growth in Rwanda, period of study: 2010-2022

Abstract

This study investigates the impact of financial inclusion, bank credit to the private sector, and broad money (M3) on economic growth in Rwanda from 2010 to 2022. Financial inclusion, measured by access to financial services such as bank accounts, mobile money, and formal credit, plays a critical role in fostering inclusive economic development. Additionally, macroeconomic indicators such as bank credit and broad money are crucial in determining the liquidity and investment potential within the economy. Using a comprehensive time-series analysis, this research explores how financial inclusion and monetary variables influence Rwanda’s GDP growth. The results reveal a positive and significant relationship between financial inclusion, the expansion of bank credit to the private sector, and broad money supply with economic growth. Increased access to credit and a growing money supply have facilitated greater economic participation, investment, and productivity, driving Rwanda’s economic development. These findings underscore the need for continuous efforts in financial sector reforms to enhance financial access, credit availability, and monetary stability for sustained economic growth.