This study examines the impact of financial inclusion on poverty in Sub-Saharan Africa (SSA) using data from 45 countries between 2001 and 2020. We find clear differences in how financial inclusion affects poverty across groups of countries: In the first group, financial inclusion reduces poverty, but in the other two groups, it increases poverty. Countries with higher incomes, lower inflation, stronger human capital, and greater trade openness are more likely to experience reduced poverty through financial inclusion. In countries lacking these conditions, financial inclusion can exacerbate poverty. These findings demonstrate that reforms aimed at increasing incomes, enhancing human capital, maintaining low inflation, and promoting trade are essential for facilitating financial inclusion and reducing poverty. Such reforms need to be tailored to each country's specific conditions and be part of broader strategies that encompass education, agriculture, and fair access to financial services.

Financial inclusion; poverty; Sub-Saharan Africa; finite mixture model; heterogeneity