Financial Crimes and Financial Inclusion: The Role of Institutional Governance Quality

Policy makers have appreciated pivotal role of financial inclusion in improving social cohesion and poverty alleviation. Thus, policies are evolved to advance frontiers of financial inclusion but the increasing level of global financial crimes seems to be impending tides of progress. This study used panel data to investigate the effect of institutional factors on dynamic and causal relationship between financial crime and financial inclusion. The study found evidence of causality between financial crime and financial inclusion. It was also established that institutional factors have significant effect on the relationship between financial crime and financial inclusion. Thus, this study recommends that financial regulators should continue to strengthen their economies anti-money laundering and corruption fighting strategies by way of strengthening enforcement of existing legal frameworks, and also exploring international collaborations.