Barriers to financial inclusion and socioeconomic determinants in West African Economic and Monetary Union (WAEMU) countries: a multivariate analysis

Given the low level of financial inclusion in West African Economic and Monetary Union (WAEMU) countries, it is crucial to identify the barriers that limit access to and use of formal financial services in the region. This study aims to identify the determinants of these main obstacles. It employs a multivariate probit model applied to a sample of 7,000 observations drawn from the World Bank’s 2021 Global Findex database. Our results reveal eight major obstacles to financial inclusion. The main issue is the lack of money, followed by the high cost of services. These barriers appear to be interdependent: high costs and geographical distance are often cited together, whereas lack of money and lack of trust are perceived as substitutes. Furthermore, barriers vary according to socioeconomic characteristics. Individuals with sufficient resources, women and well-educated individuals are more likely to face obstacles of a voluntary nature. Conversely, people with low incomes, no schooling or living in rural areas are mainly subject to involuntary constraints such as cost, distance or lack of documentation. Access to digital technologies plays a decisive role in reducing these constraints. Our results remain robust when we use the instrumental variable probit model. The results suggest that developing digital financial services, improving financial education, simplifying administrative procedures and extending branch networks, particularly in rural areas, are promising levers. Such measures would broaden access to financial services for vulnerable populations and thus help reduce inequalities, promote economic growth and household resilience, and achieve the Sustainable Development Goals.