Digital Financial Inclusion and Gender Development in Sub-Saharan Africa: The Moderating Role of Institutional Quality in Advancing Inclusive and Sustainable Development

Gender development in Sub-Saharan Africa (SSA) remains influenced by financial, labor market, and institutional conditions that vary across countries. This study examines the relationships of digital financial inclusion (DFI) and female economic participation (FEP) with gender development (GD), focusing on the moderating role of institutional quality (IQI). Using panel data for 15 SSA economies over 2015–2024, the study constructs composite DFI and IQI indices using principal component analysis (PCA) and employs Method of Moments Quantile Regression (MMQR) to investigate heterogeneity across the conditional distribution of GD. Feasible Generalized Least Squares (FGLS), Instrumental Variable Quantile Regression (IVQR), and Two Stage Least Squares (2SLS) estimators are additionally used to assess the robustness and sensitivity to potential endogeneity. The MMQR results indicate that DFI and FEP are positively and significantly associated with GD across the baseline conditional quantiles. Economic development and trade openness also exhibit positive association, whereas urbanization is generally negative and its statistical significance varies across specifications. IQI is generally positively associated with GD, although its statistical significance varies across the models and quantiles. The moderating results of DFI×IQI and FEP×IQI interaction terms are heterogeneous across the models and quantiles. The findings highlight the relevance of digital financial inclusion and female economic participation for gender development, while indicating that institutional quality conditions these relationships differently across the distribution of gender development. The findings provide insightful policy recommendations to 15 SSA economies.