Determinants of Access to Formal Financial Services among Rural Farmers in Ethiopia: A Meta-Analysis

Abstract

Financial inclusion is a cornerstone of inclusive development, especially in rural economies where access to formal financial services remains limited. In Ethiopia, smallholder farmers face persistent barriers to financial inclusion despite national strategies aimed at improving their financial access. While numerous empirical studies have explored these determinants, findings remain fragmented and inconclusive. This study aims to systematically synthesize empirical evidence on the determinants of access to formal financial services among rural farmers in Ethiopia through meta-analysis. A systematic review and meta-analysis were conducted following PRISMA guidelines. The study draws upon a rich body of literature published between 2010 and 2024, resulting in 18 eligible studies, which employed logit model to assess determinants. Effect sizes were extracted and pooled using a random-effects model to account for heterogeneity. Meta-regression was performed to identify moderators of variation in effect sizes. The meta-analysis revealed income, financial literacy, and credit experience as positive and statistically significant determinants of access to formal financial services. Other commonly studied variables such as gender, education, and distance to financial institutions showed non-significant pooled effects. Meta-regression revealed that sample size and financial inclusion measure significantly moderated the effect of income, while region and publication year did not. Rural financial inclusion in Ethiopia is significantly influenced by income level, financial literacy, and prior credit experience. These findings highlight the need for targeted interventions that promote income generation, financial education, and access to introductory credit schemes. Standardizing financial inclusion metrics and improving geographic study coverage are essential for future research and policy formulation.