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Determinants of Financial Inclusion in Malawi

Onelie Nkuna
Moffat Banda
Ephraim Chirwa


This paper explores the determinants of financial inclusion from the usage perspective in Malawi. Using data from the 2014 Baseline Survey on  Financial Literacy and Consumer Protection ; and probit and multivariate probit models, the study reveals that financial capability is the most  important factor in positively influencing the likelihood of usage of financial products. Other important factors include age, employment, income,  marital status, education, gender and geographical distribution. The study, however, finds reverse gender gap in financial inclusion in Malawi, thus  women are more likely to use financial products and services than men. Further, individuals residing in urban areas are more likely to use financial  products and services than those in rural areas whilst those in the northern region are likely to be more included than those residing in other  regions. With regard to individual products, the study finds that reverse gender gap also exists with regard to ownership of savings accounts, credit  accounts and investments. The study further finds that the likelihood of owning these products increases with age, level of education, income, being  married and living in an urban area. One key policy implication from the study therefore is the need to enhance financial capability through,  among others, promotion of financial literacy so as to enhance financial inclusion. 

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print ISSN: 2312-9204