Financing People and Planet: The Role of Inclusive Finance and Rural Population in Advancing Digital Inclusion and Environmental Sustainability in Africa

This study examines how domestic credit to the private sector contributes to progress on the sustainable development goals (SDGs) in Africa, with particular attention to digital inclusion, inequality, demographic dynamics, and environmental sustainability. It draws on data from eight economies including South Africa, Kenya, Ghana, Tanzania, Nigeria, Ethiopia, Mozambique and Côte d'Ivoire for the period 2000 to 2022. The analysis applies a panel autoregressive distributed lag model with Pooled Mean Group estimation to capture both short‐run dynamics and long‐run equilibria. The findings show that increased access to credit significantly boosts internet penetration in the short run, highlighting the role of inclusive finance in bridging Africa's digital divide. By contrast, the effects on inequality and environmental outcomes are weaker and highly contingent on demographic structures, especially the rural population share. Panel cointegration results confirm a stable long‐run relationship with rapid adjustment following external shocks. The results suggest that credit expansion on its own cannot secure equitable and sustainable outcomes unless paired with policies that widen rural financial access and embed environmental safeguards. Robustness checks reinforce the reliability of these findings. The study concludes that well‐directed domestic credit can act as a catalyst for inclusive digital adoption, green growth and long‐term sustainability. Strengthening inclusive financial systems, promoting rural outreach and integrating green finance mechanisms are therefore essential to unlock the transformative potential of domestic credit for people, planet and prosperity in Africa.