Bridging the Gap: The Role of Financial Inclusion in Addressing Environmental Challenges and Advancing Sustainability

ABSTRACT It has become imperative to revisit the growing concern raised by financial inclusion and environmental issues globally, especially within low‐ and middle‐income economies such as the Sub‐Saharan African (SSA) region. Hence, this study aims to examine the impact of financial inclusion on environmental sustainability in SSA countries. The data was collected for the period between 1990 and 2023 and analyzed using the CS‐ARDL estimator, while the quantile regression model estimator served the purpose of robustness check. The findings revealed that financial institutions and access to financial markets worsen environmental sustainability in SSA countries. This suggests that financial inclusion can lead to ecological degradation. Again, the results indicate that population increase, energy use, and economic growth continue to be the major causes of ecological deterioration in SSA. However, renewable energy consumption promotes environmental sustainability in both the long and short term. The study recommends that SSA countries to drive a sustainable environment with increasing financial inclusion in the region is to integrate green finance into the financial systems, which means that financial institutions must launch credit products based on sustainability, promote green financing, sustainable investments, establish a stable regulatory framework for sustainable finance, promote family planning, sustainable urbanization policies, and comprehensive educational programs with the gains of solving attendant environmental issues within the region.