Financial Inclusion and Economic Security of East African Community States

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dc.contributor.authorKerage Peter M; "National Defence University-Kenya"
dc.date.accessioned2025-09-12T09:20:21Z
dc.date.available2025-09-12T09:20:21Z
dc.date.issued2025
dc.description.abstractFinancial inclusion is a key pillar for financial deepening which a necessary condition for promoting national security and inclusive economic growth. Using panel data for the years 2012 to 2021, this paper explored the interplay between financial inclusion and economic security of East African Community (EAC) States. Three financial inclusion dimensions were considered, namely, usage, penetration, and availability dimensions. Furthermore, the researcher developed a composite financial inclusion index to assess the overall influence of financial inclusion components on economic security. Inflation rate, trade openness and population growth rate were incorporated in the models as control variables. Data was collected from the World Development Indicators (WDI) of the World Bank and the Financial Access Survey (FAS) of the International Monetary Fund (IMF). Three countries (Rwanda, Uganda, and Kenya) were selected based on availability of consistent representative data. The study employed the Generalized Method of Moments (GMM) as a data analysis model. The study established that availability dimension of financial inclusion, usage dimension of financial inclusion and composite dimension of financial inclusion significantly and positively impact economic security while penetration dimension of financial inclusion improves economic security but not significantly. Furthermore, the number of bank branches, ATMs, mobile money agent outlets, mobile money transactions, outstanding deposits and moderate inflation significantly foster economic security. Findings for mobile money accounts and bank deposit accounts weaken economic security. It is recommended that EAC governments must champion for financial inclusion in their quest to combat terrorism and other criminal activities that potentially arise from financial exclusion; increase the number of credit reference bureaus (CRBs) in subregion to deal with information asymmetry and establishment of a National Commission on Financial Inclusion under the National Treasury (NT) to synchronize financial inclusion-related laws, rules, programs, and initiatives
dc.identifier.urihttps://repository.ndu.ac.ke/handle/123456789/54
dc.language.isoen
dc.publisherNational Defence University-Kenya
dc.titleFinancial Inclusion and Economic Security of East African Community States
dc.typeThesis

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