The Effect of Financial Inclusion on Credit Risk in Sae C Countries The Moderating Role of Financial Regulation and Stability

The objective of this study is to contribute to the knowledge about the relationship between financial inclusion and credit risk in the Southern African Development Com-munity (sAD C) countries, which remains relatively unexplored in the developing coun-tries context. The result of panel vector autoregressive models (PvAR) estimation shows that there is no bidirectional causality between financial inclusion and credit risk, but there is unidirectional causality where financial inclusion improves credit risk. Further-more, the feasible generalised (FGLs) estimation result confirms that financial inclu-sion reduces credit risk. Policymakers in sADC countries should implement measures that foster financial inclusion to achieve financial stability.