JOURNAL OF LIAONING TECHNICAL UNIVERSITY

FINANCIAL INCLUSION ANDENVIRONMENTAL SUSTAINABILITY NEXUS IN ECOWAS: A NEW EMPIRICAL EVIDENCE

ONYINYE I. ANTHONY-ORJI, EMMANUEL T. IDEBA, ANTHONY ORJI*, DURU ERASMUS EJIKE, IFURUEZE PRISCILLA C., NWAIMO CHILAKA E., AMAKO JONATHAN, C.

ABSTRACT

United Nations Environmental Program (UNEP) pointed out that although Africa makes a small contribution to climate change, it is yet the most vulnerable to its consequences. This vulnerability results from the region's lack of finance to protect itself from the impact of climate change. Hence, this study empirically revisits the debate on the impact of financial inclusion on environmental sustainability in West Africa with emphasis on the 16 ECOWAS member nations. The variables of interest are Total greenhouse gas emissions, commercial bank branches, Depositors with Commercial Banks, Non-renewable energy consumption, Renewable energy consumption, and population. The Westerlund (2007) co-integration test, Panel corrected standard errors (PCSE), and the Common Correlated Effects Mean Group (CCEMG) were utilized to achieve the study's objective. The result reveals that commercial bank branches have a positive and insignificant impact on Total greenhouse gas emissions.In contrast, Depositors with Commercial Banks negatively and significantly impact Total greenhouse gas emissions. Accordingly, the study concludes that financial inclusion positively impacts environmental sustainability in West Africa. As a result, the study suggests that banks in the region switch to green energy across all of their branches. Additionally, initiatives should be made to promote saving and loaning savings to companies and investors dedicated to environmentally friendly investments and reducing greenhouse gas emissions in the region.

Keywords: Financial Inclusion, Environmental Sustainability, ECOWAS

JEL Codes: B26, D53, E44, F64, O13