Effect of Financial Regulation on Financial Inclusion in the SADC Region

Financial regulation has the potential and power to instil trust and stability in the financial system, but its impact on financial inclusion is still debatable. Hence, the objective of this study is to examine the effects of financial regulation on financial inclusion in fourteen SADC countries. This study applies the Generalised Method of Moments system (system-GMM) to the period 2010 to 2022. Based on the results, financial regulation, and domestic credit to the private sector have a significant positive impact on financial inclusion in the SADC region. However, financial stability and broad money as a percentage of GDP were indicated to have a significant negative effect on financial sectors in the SADC. Since the SADC region is still struggling with access to and use of financial services, this study recommends that the government and financial sector form a strong partnership to drive financial regulatory compliance while placing financial inclusion goals at the centre.