Financial inclusion and food security nexus: Evidence from the Southern African Development Community

Financial inclusion is considered a vehicle to inclusive growth and thus critical in addressing the three key socioeconomic ills of modern society—particularly in Southern Africa: poverty, unemployment, and inequality. Being excluded from the financial services sector has been associated with poverty and derailed economic emancipation. This study investigates whether financial inclusion will lead to the expected reduction in poverty and improved food security. The empirical investigation makes use of data from the Southern African Development Community, considering the different levels of financial sector development and overall economic advancement of each member country to ensure that the results are comparable. A Generalised Method of Moments is used to test for the association. The study finds that access to financial inclusion has a significant impact on the overall level of food security in the region and notes the need to increase access to and usage of financial inclusion services to improve welfare.