Financial outreach, financial innovation, and sustainable development in Africa

There has been a call on policy makers in the African continent to formulate and implement initiatives that help to realise some of the Sustainable Development Goals (SDGs), due to the low performance of the continent in terms of meeting the targets of the SDGs. Because of this, the study sought to investigate how banks’ financial outreach and intermediation contribute to sustainable development in the continent. Information was collected on 34 African economies for a period of 11 years spanning from 2010 to 2020. The study employed the two-step system generalised method of moments technique to estimate the findings. It was discovered that financial outreach has a significant positive and negative relationship with sustainable development, depending on the indicator used to measure outreach. On various dimensions, financial outreach had a negative influence on carbon dioxide emissions, a positive impact on economic sustainability, and an inverse relationship with social sustainability. It was also revealed that financial innovation has a significant negative link with sustainable development in Africa. Additionally, the findings revealed that both financial outreach and innovation serve as moderating variables in the finance/development nexus. The study recommends that governments and policy makers in various African countries work together with financial service providers to ensure fair, flexible, and alluring interest rates on loans to the underprivileged, disadvantaged ones in society, and vulnerable businesses to smooth their consumption and boost their businesses.


Introduction
Economists have argued that trade-off exists among present and future consumption across generations which has repercussions on the standard of living of both generations. Because of this, attention has shifted from achieving enhanced economic growth to a more sustainable means of not compromising the standard of living of the future generation (Koirala and Pradhan 2020). The concept of sustainable development (SD) implies that in meeting the consumption needs of the current generation, efforts must be made in conserving resources for future purposes. There has been a major concern in Africa on how to achieve some socio-economic goals like poverty reduction, increasing employment, access to healthy food and water, and improved economic growth. In addition to the achievement of these goals, it also become necessary for nations in the continent to lower the amount of carbon dioxide emissions to solve the issue of global warming. Due to this, African countries have joined hands with other neighbouring continents to adopt Sustainable Development Goals (SDGs) which integrate economic, social, and environmental concerns to ensure that all persons have value for human development to end poverty, safeguard the environment, and guarantee that everyone lives in peace and prosperity (Emas 2015).
Despite the continent's tremendous economic expansion, inequality, poverty, and unemployment rates are still high (African Development Bank 2018). The high unemployment rates may be linked to poor levels of human development brought on by a lack of access to high-quality educational and medical facilities, which has left a huge portion of the 1 3 people unemployed (African Development Bank 2018). A report by International Monetary Fund (2017) reveals that the economic growth of the African continent since the adoption of the SDG has been much lower than both the long-term historical average and the SDG target of 7% annually. Moreover, in assessing the performance of sustainable development across continents, it was observed that the African continent is at least level in the world (Bilbao-Ubillos 2013; Li et al. 2014;Hickel 2019) and as such, much attention should be channelled towards the continent (Jin et al. 2020). Several reasons have been given by researchers for the low SD performance of developing nations. Researchers have explained that since the economy and citizens' income levels are both quite low and due to the ineffective governments or insufficient fiscal income, the supply of public goods and services, such as public health, education, and ecological protection, becomes inadequate and less efficient (Jin et al. 2020).
In the attempt to create a sound and more sustainable economy for both the present and future generations, the contribution of the financial system cannot be overlooked, since Klapper et al. (2016) have opined that the activities of the financial sector are crucial in the realisation of the SDGs in Africa. This is due to the enormous role banks play in ensuring that the socio-economic wellbeing of people is guaranteed through granting access to low-income earners to benefit from the financial system and introducing innovations into the financial system like the usage of advanced technology to screen out low-quality green innovation from high-quality green innovation projects and offer loans to finance the latter which helps promote environmental sustainability (Laeven et al. 2015;Yuan et al. 2021). Banks ensure that loans are offered to socially responsible organisations that have environmental sustainability at heart for productive activities. The activities of the banks result in entrepreneurial projects and promote sustainable investment in the private sector, which help improve the living condition of people since the unemployment rate would be reduced (Kargbo and Adamu 2009).
However, since the banking industry uses a considerable quantity of natural resources, like energy and paper, and produces waste, its contribution to sustainable development is being criticised (Siueia Wang, & Deladem, 2019). More so, other researchers have argued that banks are mostly less suited in fighting against the pollution of the environment, in the sense that they are conservative towards technological advancement and may be reticent in financing any possible green technology that could depreciate the value of the collateral supporting existing loans (Minetti 2011). Also, since green s are normally intangible (Hall and Lerner 2010a), banks may be unwilling to fund such projects due to the difficulty in collateralizing such intangible assets due to their limited ability to be used elsewhere (Carpenter and Petersen 2002). Despite the criticisms put forward on the contributions of banks towards sustainable development, the current study focused on banking outreach because the banking sector dominates the financial sector and intermediates the majority of the funds in the continent. To add to these, it is quite difficult to access statistical information on non-bank financial institutions than the banking sector.
The impact of the financial system on sustainable development cannot be well felt if people are excluded from the formal financial system as Sethi and Acharya (2018) and Ozili (2020) have espoused that being a part of the financial system and gaining access to financing are a significant step towards economic development and SDG achievement. The report by Demirgüç-Kunt et al. (2022) based on Global Findex Database at the World Bank reveals that 76% of the global population while 71% of the population in developing economics own an account. Notwithstanding the efforts in extending financial services to the vulnerable group of society since access to a formal financial system largely helps achieve most of the SDGs (Klapper et al. 2016), 45% of the adult population in the African continent does not have an account with a formal financial institution (Demirgüç-Kunt et al. 2022). Though the number has reduced from 77% in 2011, the report further revealed that the region is still among the bottom three regions globally in terms of account ownership. Considering the claim by Klapper et al. (2016) that access to the financial system aid in achieving most of the SDGs, these statistics above are disconcerting.
Financial outreach ensures the financial incorporation of the unbanked populace into the formal financial system through the rendering of varied financial services and the offering of innovative opportunities. Impliedly, to entice more people into the financial system, there is a need for financial institutions to offer and deliver diversified assets and investment opportunities through the diffusion and adaptation of innovation. It is also germane to state that if innovations are not effectively communicated via fostering inclusivity in the formal financial markets, their potential economic benefits may go unnoticed (Domeher et al. 2022). Concerning the innovation diffusion theory, innovation in the financial system would influence growth and development when there is the promotion of an inclusive financial system which would enable the innovation to be used by a large range of people.
The use of GDP growth as an indicator of sustainable development has been criticised by scholars since it does not exhibit all the dimensions of sustainable development (Khan 2015). Instead, it measures only the monetary value of total output without considering the enjoyment of shared prosperity by the people and the damage caused to the economy through natural resource depletion. Because of this, the study utilised the adjusted net savings as an indicator for sustainable development that covers all the dimensions of SD. Additionally, the essence of finance in fostering sustainable development in the African context has received little attention. The few studies that assess the finance and growth/development nexus concentrate either on the influence of financial outreach or inclusion and growth/development nexus (Guru and Yadav 2019;Kumar et al. 2018;Sethi and Acharya 2018) or financial innovation and growth/development nexus (Ajide 2016;Okafor et al. 2017;Chukwunulu 2019;Mollaahmetoğlu and Akçalı 2019). Moreover, the majority of the studies focus on only one dimension of sustainable development (Datta & Singh, 2019;Makina and Walle 2019;Matekenya et al. 2020;Amin et al. 2021).
Furthermore, no study has examined the trivariate relationship among financial outreach, innovation, and sustainable development both in advanced and developing economies. Also, studies have argued that innovation in the financial sector speeds up the financial process in terms of increasing access to formal financial services (Andrianaivo and Kpodar 2012;Raffaelli & Glynn, 2015;Qamruzzaman and Wei 2019) and the exposition of diffusion of innovation theory and Domeher et al. (2022) that the economy would exclusively benefit from innovation when such innovation is adopted and used by people.
It is unclear in the extant literature whether banks can balance the achievement of their intermediation goals and at the same time help in mobilizing resources into economic, environment, and social sustainability towards the achievement of the SGDs in Africa. With the dearth of studies on the trivariate relationship among the variables, the current study contributes to extant literature by investigating whether the sustainable development of Africa can be augmented if banks offer affordable, diversified, and innovative financial products and services to the formerly unbanked segment of the population, by assessing whether financial innovation and outreach can act as moderating variables in the finance and growth/development nexus. The paper also adds to literature by using both the individual dimensions and composite measure of sustainable development which gives the true state of the sustainable development of the continent rather than relying on only one dimension. We therefore stipulate three hypotheses; thus, a significant relationship exists between outreach and sustainable development, financial innovation augments sustainable development, and lastly, both financial innovation and outreach can act as moderating variables in the finance and growth/development nexus.
The rest of the paper is presented as follows: we deliberated on the theoretical perspective relevant to the paper and evidence from previous works in the subject area. This is followed by a discussion of the methodology used and subsequently presented the analysis and discussions of the results. We concluded by providing necessary recommendations and policy implications.

Theoretical perspective
The use of adjusted net savings (ANS) is supported by the theoretical considerations of Solow (1974) and Hartwick (2017). These theorists developed the Solow-Hartwick sustainability model which explains that for an economy to achieve intergenerational equity to be enjoyed by future generations in the same or greater amount as experienced by the current generation, or for a nation to be on the sustainable development path, all profits earned from the use on non-renewable natural resources should be reinvested in renewable resources. In this way, a country will achieve sustainable development if the utility function determined by consumption is non-diminishing for a long period (Gutés 1996). Neoclassical theory deduced that a non-diminishing utility function would be possible if capital stock is constant (Solow 1974). This sustainability model is viewed as a savings-investment rule in the sense that the non-declining or constant capital stock could be achieved if the savings rate of a country for a given period is more than or the same as the rate of depreciation on both natural and artificial capital (Pearce and Atkinson 1993). If this condition is met, then such a nation can be said to be sustainable on the path of development.
A cursory scrutiny of the model above seems to concentrate on only economic sustainability without focusing on the other dimensions. However, the indicator used to measure sustainable development in this study captures all the other dimensions of sustainability. ANS as an indicator for sustainable development describes the monetary value of the total production of an economy after accounting for the enjoyment of shared prosperity by the society as well as the depletion of natural resources that emerged in the production process (Gnegne 2009). The relationship between financial outreach, innovation, and sustainable development was explained using the following theories.

Environmental Kuznets curve (EKC) theory
The proponent of the EKC theory contends that in the first phase of financial outreach, households and small and medium-scale enterprises (SMEs) have better access to basic financial services and credit facilities which enable them to buy large properties, plants, and equipment (PPE) which increases carbon dioxide emissions (Kuznets 1955;Sadorsky 2010;Acheampong 2019). It also increases the establishment of manufacturing companies which can contribute to increased land degradation, pollution, and carbon emissions (Aye and Edoja 2017). More so, households can demand high-energy-consuming vehicles and home appliances causing more carbon emissions (Odhiambo 2020). This view summarises that increased financial outreach deters sustainable development. In the later stage, improved financial outreach encourages individuals and companies to invest in ecologically friendly technology and adopt more energy-efficient and environmentally friendly manufacturing methods, resulting in less environmental degradation (Abbasi and Riaz 2016). Moreover, at this stage, investors expect corporations to take environmentally responsible measures to reduce CO 2 emissions (Renzhi and Baek 2020). In summary, increasing financial outreach is useful in enhancing vulnerable groups' climate resilience, thereby promoting sustainable development.

Credit information-sharing theory
The information-sharing theory emanated from Freimer and Gordon's (1968) information asymmetry hypothesis, which was extended by Stiglitz and Weiss (1981). The theorists claim that as a result of the lack of comprehensive, complete, and trustworthy credit information on credit market participants, lenders are unable to distinguish between good and bad borrowers, resulting in the lender's allocation of credit to risky borrowers. The credit information theory provides insight into how banks can extend credit facilities to a large group of people who would have otherwise been denied due to strict loan conditions when they get credit information on potential customers. The study argued that when people get access to a formal financial system, it might influence their decisions regarding production and employment, enable them to spend their money in the formal economy, make them less susceptible to the negative effects of poverty, and aid them to engage in ecologically friendly practises.

Schumpeter's theory of innovation and economic development
Schumpeter's theory of innovation discusses how innovation in the financial sector influences growth and development. The theorist highlighted that financiers or financial intermediaries use advanced technologies to screen out entrepreneurs and provide funds for less risky ones to aid them to come forth with new ideas and expand their operations (Schumpeter 1939). It is therefore argued that as firms can introduce innovative ideas and expand their businesses, employment and income level increase hence allowing people the opportunity to save for children's education and attend to proper health care.

The dynamic model of financial innovation and endogenous growth
The dynamic model of financial innovation and endogenous growth was developed by Michalopoulos et al. (2009) and revised by Laeven et al. (2015). The dynamic model of financial innovation espoused that banks do not only use advanced technology to screen and monitor entrepreneurs; instead, they bring out new innovative products and services to meet the diverse needs of customers. Rousseau (1998) concurs with this argument and surmised that innovations in the banking sector do not exclusively come from banks in their attempt to minimise credit risk through screening and monitoring but directly affect financial depth than growth. This is because as new products and services emerge, more people would be lured to enter into the financial system to enjoy these innovations. Based on this exposition, we espouse that innovation in the banking sector would attract more people into the financial umbrella leading to more funds for investment purposes.

Diffusion of innovation theory
The diffusion of innovation theory as originated by Rogers (1962) explains the patterns of how new products, ideas, services, or behaviours spread or diffuse through a particular social system or population over some time. The idea of the proponent of the diffusion of innovation theory implies that innovation in the financial system would be embraced and accepted when it is spread out, which could be materialised when a larger population has access to the financial system. It is on this exposition that the study argued that financial outreach can serve as moderating variable in the finance/development nexus.

Sustainable development
The concept of sustainable development has been described as a cliché and as such has several definitions and interpretations (Kelly et al. 2004). According to UN Women (2018), sustainable development refers to socio-economic, human, and environmental development that promotes economic opportunity and social inclusion, gender equality, and ecological conservation without abandoning any individual. The World Bank (2001) documented that sustainable development should be recognised as inclusive growth which includes putting in place environmentally sound measures to lessen poverty and establish shared prosperity for current population while also meeting the demands of future generations. Also, it is not only about how to maintain the environment but also about ways to alleviate poverty or improve material living standards while also preserving or improving important natural capital for future wellbeing (Polasky et al. 2019).
From the above definitions, it is prudent to note that sustainable development is a multi-dimensional concept which encompasses many diverse elements of life, from environmental protection and natural capital preservation to achieving economic success and equality for present and future generations.
The concept is derived from the triple bottom line concept by Elkington (Elkington 1998) which explains that there should be convergence of the three dimensions of sustainability, thus, environmental or ecological, social, and economic or financial sustainability. The environmental dimension basically deals with upholding the quality of the environment to enhance economic activities and improved life of individuals. The social pillar focuses on human rights and equality and respect for and protection of cultural diversity while the last dimension centres on sustaining the available capital (natural, human, and social) needed for income and improvement in standard of living while firms make profit (Nadeem et al. 2020).

Financial outreach
The concept of outreach has been described as vague since it includes both qualitative and quantitative aspects (Abdulai and Tewari 2017a). The concept has been applied in several disciplines like natural sciences, religion, among others (Rao and Fitamo 2014). In the field of finance, it is termed as financial outreach, which refers to the process of providing a variety of financial services to larger population, regardless of their income or poverty status (Moyo 2020). Other researchers argue that outreach is concerned with granting of loans to the poor who do not have access to formal financial system in order to alleviate poverty and assist them in starting their own enterprises (Conning 1999;Hermes et al. 2011;Lopatta et al. 2017;Singh and Padhi 2019). The definitions by these authors raise the concern as to whether the number of customers using financial services in general or only the number of impoverished people using financial services be considered when evaluating outreach. If the latter is considered how then can they be identified? As a result of this, this study defines outreach as the extent to which formal financial products and services are made accessible to all persons through bank branch penetration and credit information sharing which would enable other financial institutions to get credit information recorded with one lender. According to Bester's (Bester 1985) incentive or motivation effect, this act helps small firms and low-income earners get access to finance.
Outreach has been discovered by Woller and Schreiner (2004) to have six dimensions and as such has been termed as a hybrid concept (Rao and Fitamo 2014). These dimensions include length, worth, scope, cost, depth, and breadth. Particularly for this study, much emphasis is laid on the depth and breadth of outreach as earlier scholars have focused on them and information on them is easily accessible (Bayai and Ikhide 2016; Abdulai and Tewari 2017a).
Depth of outreach The depth of outreach deals with the qualitative aspect of the population which focuses on both the economic and demographic status of the customers being served by the financial institutions (Moyo 2020). According to Navajas et al. (2000, p.336), depth of outreach refers to 'the value the society attaches to the net gain from the use of microcredit by a particular borrower'. From the definition of Moyo, the economic aspect is concerned with providing financial products to economically inactive population or the economically active populations who work in micro-, small, and medium enterprises (MSMEs) as well as those who earn very low incomes. The demographic perspective takes into account the delivery of financial services to more females than males as women are more vulnerable to poverty than men as well as serving financial products and services to disabled, aged, and those living in rural areas (Anh and Tam 2013).

Breadth of outreach
The breadth of outreach which focuses on the quantitative aspect of outreach refers to the number of users of formal financial products. Kaur (2014) argues that outreach breadth refers to the degree to which credits are provided by financial institutions to a wider range of individuals. It is also expressed as the numerical value, like the number of customers particularly those who formerly did not have access to the formal financial system to be offered with financial services (Saxena and Wagofya 2018). Moyo (2020) posits that this aspect of outreach is achieved if a wide range of financial services and products is offered to as many clients as feasible in the right proportion mix and quantity.

Financial innovation
Financial innovation has been defined by earlier researchers as the development of new financial institutions, financial instruments, and payment mechanisms (Merton 1992). It is also refers to the positive modifications or changes that occur in the financial markets and institutions' financial system or financial intermediation process (Qamruzzaman and Wei 2018). Moreover, Idun and Aboagye (2014) explained that financial innovation is the application of new financial instruments, as well as technological and market information, to provide clients with a new product or service that is less expensive and/or has better features so that the innovating company makes a profit than before. Financial innovation serves as a catalyst for transforming a static economic situation into a dynamic one by ensuring increased financial efficiency through accelerated capital formation, technological advancement for human capital development, and long-term financial development (Johnson and Kwak 2012;Mwinzi 2014;Sood and Ranjan 2015).
Other researchers argue that financial innovation also enhances the ability of financial intermediaries (banks) to efficiently allocate resources by giving them improved technology to screen information (King and Levine 1993;Laeven et al. 2015). The authors documented that as a result of financial innovation, banks are able to screen out good projects from risky ones and grant loans for their financing. By so doing, these banks help alleviate the issue of agency problem and information asymmetry between owners and managers of companies. Yuan et al. (2021) espoused that financial intermediaries are able to make higher profits and maintain competitive advantage when they use advanced technology to screen out borrowers, thereby reducing credit liability. Aside from the banks coming out with innovative technologies to screen borrowers, they also introduce new innovative products into the financial system that aid in reducing the adverse impacts of some macroeconomic indicators on their clients (Rousseau 1998).
Nevertheless, Arnaboldi and Rossignoli (2013) have described financial innovation as a 'double-edged sword' since it has both good and bad sides (Beck et al. 2016). It has been disclosed to be responsible for the recent global financial crisis of 2007/2008 (Llewellyn, 2012) and also results in the volatility of industry growth particularly for institutions that ignores securitization of investments (Beck et al. 2016;Adam and Guettler 2015). Furthermore, Henderson and Pearson (2011) posit that financial innovation leads to increased risk of financial insolvency and institutional complexity and lessens interdependency among firms as new financial institutions arise to transact business in innovative ways. It also results in the spike of asset prices and credits (Boz and Mendoza 2014).

Financial outreach and sustainable development
In assessing the link between access to a formal financial system and sustainable development, several authors have concentrated on only one dimension, thus, the economic perspective which is mostly viewed as economic growth. Also, in the literature, financial outreach, deepening, and inclusion are not clearly distinguished as the same indicators have been used as proxies for these terms. As a result of these aforestated issues, the review is centred around these areas.
Granting businesses and people access to the formal financial sector through increment in the number of bank branches and sharing of borrowers' credit information can either enhance or retard environmental sustainability (Abbasi and Riaz 2016; Ehigiamusoe and Lean 2019; Odhiambo 2020). In the positive sense, researchers have opined that permitting the already excluded populace into the financial system offers them access to cheap and valuable financial packages that help them to invest in green technology that does not emit more carbon dioxide (Yahaya and Ahmad 2018;Salehnia et al. 2020). For instance, a report by Innovation for Poverty Action (IPA) ( 2017) reveals that through financial access, farmers can acquire affordable solar energy microgrids that emit low carbon dioxide as compared to coal-burning plants. On the other perspective, it is argued that increased access to finance enhances industrialisation which boosts economic growth but results in the emission of more carbon dioxide which retard environmental sustainability (Acheampong 2019). In the same vein, financial outreach enables people to purchase products such as refrigerators, air conditioners, and other automobiles that consume more energy and emit more carbon dioxide which tampers with environmental sustainability (Maji et al. 2017).
Additionally, deepening the financial system through the activities of banks promotes social sustainability because denying people access to the formal financial system is the originator of poverty, which leads to high illiteracy, improper healthcare facilities, and a lack of nutritious meals (Huang et al. 2022). Poverty has also been determined to be a significant factor contributing to poor mental health conditions among the less privileged (Cole and Tembo 2011) due to their susceptibility to unhealthy living conditions, stressful events, and poor health (Baird et al. 2013;Miller and Rasmussen 2017;Adhvaryu et al. 2019). Other researchers have argued that financial outreach through credit information sharing increases competition among financial intermediaries which lowers intermediation costs thereby enlarging the credit access bracket to potential entrepreneurs who previously lacked access to the formal financial system (Liu et al. 2022). This would result in the creation of more jobs due to the setting up of new businesses by these new entrepreneurs and the expansion of existing businesses, which ultimately enhance economic development (Mushtaq and Bruneau 2019; Singh and Padhi 2019). Relying on all these works, we hypothesised that: H1: Financial outreach significantly affects the sustainable development of Africa.

Financial innovation and sustainable development
Financial innovation has been disclosed to connect the financial sector and sustainable development by both earlier and recent scholars (Kates, Parris, & Laeven et al. 2015;Saqib 2015;Ajide 2016). Innovation is a necessary component of economic growth (Idun and Aboagye 2014;Idun 2021;Qamruzzaman et al. 2021) since it brings new concepts, techniques, and explanations for existing problems. Most importantly, it makes an organisation more competitive and produces more value. Ajide (Ajide 2016) analysed the moderating role of bank competition on the relationship between financial innovation and sustainable development in West Africa using 14 years of annual data (2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011)(2012)(2013). Using panel estimation, the author found that increased banking efficiency as a result of competition and financial innovation will augment economic growth and development. The results further discovered that the influence of innovation on development is dependent on the type of proxy used to measure financial innovation. Because of that, the growth of private credit was seen to have a positive and insignificant effect on sustainable development while the ratio of broad money to narrow money exhibited an inverse relationship. In light of the literature above, we hypothesised that:

Financial outreach, financial innovation, and sustainable development
Several researchers have documented that finance has an impact on the growth and development of every nation. In line with this, Chukwunulu (Chukwunulu 2019) noted that sustainable development, as well as social and financial outreach, relies heavily on financial innovation. Rousseau (1998) pointed out that as a result of innovation in the US's financial sector, financial intermediaries were able to screen loan applicants which leads to a reduction in the credit spread. The author further revealed that since the credit spread was reduced, more borrowers subscribed for loans which led to the deepening of the sector. Qamruzzaman and Wei (2019) argued that financial innovation promotes economic activity by allowing the underserved population of society to enter the official financial system and benefit from it. By so doing, this segment of the population gets to be served with improved financial securities and instruments and encouraged to save and invest more in new and less risky financial products. This enables them to be able to acquire their necessities of life thereby improving their standard of living. In the same way, Raffaelli and Glynn (2015) contend that financial innovation in the form of institutional innovation speeds up the financial process by increasing access to formal financial services such as the internet and mobile banking which enhances the economy.
Additionally, Andrianaivo and Kpodar (Andrianaivo and Kpodar 2012) pointed out that as a result of how convenient and affordable new technologies can be, many people tend to participate in the official financial system. The institutional development form of financial innovation speeds up larger accessibility to financial services such as mobile banking (Raffaelli & Glynn, 2015;Lumsden 2018). It has been asserted by Yawe and Prabhu (2015) that, with financial innovation such as the amelioration in financial services, instruments, and technology, the majority of individuals who would have otherwise been left out of the formal financial system currently have access. Judging from the point of view of these earlier scholars, it is imperative to assume that more people would be drawn into the financial system if financial institutions provide and render diversified products and services and investment opportunities, which can in turn boost the sustainable development of countries.

Data sources and variable measurement
This study employs the explanatory or causal research design since it seeks to explain relationships between and among variables (Zikmund et al. 2012), and as such, the current study endeavours to evaluate the relationship between financial outreach, innovation, and sustainable development. The design was relevant to the study since it plays emphasis on analyzing a phenomenon to explain the series of relationships among variables. The study made use of secondary data with annual frequencies from credible sources from 2011 to 2020. The sources include the World Development Indicators, Global Financial Development Database, and Sustainable Development Goals Indicators. These databases are exceptional in the sense that it brings together a wide range of variables for assessing the activity, size, and efficiency of financial intermediaries and markets (Ajide 2016). The choice of the sample period is dependent on the fact that all the countries used had complete information on their net interest margin which is an indicator of one of the explanatory variables. Basically, the period was settled on due to availability of accurate and complete data on all the variables of interest.

Explained variable
Sustainable development was measured as the adjusted net savings (ANS) and was obtained from the Sustainable Development Goal Indicators. Adjusted net savings according to Pardi et al. (Pardi et al. 2015) measure sustainable development from the viewpoint that saving is seen as both capital investment and wealth accumulation. The metric incorporates all three dimensions of sustainable development by ensuring that the monetary value of an economy's total production is adjusted to account for the enjoyment of prosperity by the society as well as the depletion of natural resources that arose in the cause of production.
The computation of ANS as a percentage of the gross national income (GNI) is based on the normal national income accounting where some adjustments are made to the net national savings (gross national savings less than the value of consumption of fixed capital, thus, economic dimension). Current operating expenditure on education is added to cater for human capital investment (social) while estimates of energy depletion, mineral depletion, net forest depletion, and carbon dioxide and particulate emission damage are deducted to account for natural resource depletion and environmental degradation. After all these adjustments are made, the indicator is expressed as a percentage of GNI and has been extensively recognised as an inclusive indicator for sustainable development and utilised in numerous works by Gnegne (2009)

Explanatory variables
Extant works have utilised numerous indicators as proxies for outreach. Among these are average loan size as a percentage of gross national income (Hermes et al. 2011;Karanja 2014;Heng, 2015; Abdulai and Tewari 2017b) and average outstanding loan balance (Rosenberg, 2009). Critics have contended that lower loan size does not accurately reflect outreach depth as poor clients with a good credit history are more likely to receive greater loans from banks (Churchill & Marr, 2017).
More so, others believe that because of market competition and the need to maximise profits, some banks and non-bank financial institutions have tended to reduce lending to poor clients in favour of relatively wealthy clientele who are willing to take on larger loans (Saxena and Wagofya 2018). In view this, the study adopts the measure for outreach by Beck, Lin, and Ma (2014); Abdulai and Tewari (2017b); and Moyo (2020), thus, bank branch penetration and credit information sharing. Credit information sharing is measured with private credit bureau coverage (% of adults). This is because Tchamyou and Asongu (2017) argued that information sharing through credit bureaus and public registries enhances access to finance in the African continent. Private credit bureau coverage as per the World Bank Doing Business project reports the number of individuals or firms listed by a private credit bureau with current information on repayment history, unpaid debts, or credit outstanding. This measure is essential because the credit information shared among potential lenders makes the request for collateral less important to these lenders as they have records, and they can use to effectively monitor the activities of risky borrowers (low-income earners). Imperatively, these low-income earners do not have to worry much about collateral before assessing more finance. Bank branch penetration used in this study is conceptualised as the commercial bank branches (per 100,000 adults).
Financial innovation as the other independent variable was measured with growth in net interest margin. This is because as innovation revolves, banks use sophisticated technologies which makes them more efficient in screening good borrowers out from bad ones and as this is done, banks are likely to experience growth in their net interest margin. This measure has been employed by Rousseau (1998).

Control variables
The study also used bank sector development, inflation, bank concentration, bank return, and natural resource rent as control variables. The indicators have been used because they are widely used and accepted in literature. The variables utilised in this study and their appropriate data sources are presented in the Table 1 below.

Model specification
The study adapted and modified the model used by Ajide (Ajide 2016) who studied the relationship between financial innovation and sustainable development in some selected West African countries. The baseline models for this study are specified as follows: In examining whether financial innovation or outreach can act as moderating variable an interaction term among outreach and innovation (FINN * FOUT) was included in the model as shown in models 3 and 4. where i denotes the country level variable; t represents the time variable (years); SD represents sustainable development; FOUT1 and FOUT2 represent the first and second measurement of financial outreach; FINN denotes financial innovation; (FINN * FOUT) is the interaction between innovation and outreach; Z represents the control variables; β denotes the coefficients; and ɛ represents the error term. (1)

Estimation technique
The two-step system generalised method of moments by Roodman (2009) was employed to investigate the relationship among the variables. The two-step system generalised method of moments (GMM) extends the approach used by Arellano and Bond (1991), Arellano and Bover (1995), and Blundell and Bond (1998). The approach by Arellano and Bond (1991) makes use of the lagged levels of the explanatory variables and the first difference of the variables to deal with issues of unobservable simultaneity bias and country-specific effects. Arellano and Bover (1995) later observed that Arellano and Bond's (Arellano and Bond 1991) technique would result in erroneous conclusions when the series have time-persistent problems. Additionally, Blundell and Bond (1998) contend that if the instruments utilised in the traditional first-difference GMM are not strong enough, then there is the possibility of the results of the within groups being biased. The system GMM therefore originated as a remedy to the problems posed by the approaches of the earlier scholars.
The system GMM combines both the level of the residuals and the difference of the disturbance term as well as additional instruments in the levels equations (Odhiambo 2020). It consists of one-step and two-step system GMM. The latter has been confirmed to be more efficient and robust to heteroscedasticity and autocorrelation (Obuobi et al. 2022). The choice of the two-step system GMM is motivated by the following justifications which have received massive support from earlier works (Fosu and Abass 2019;Agyei et al. 2020;Abeka et al. 2021). The estimator is suitable to use when the cross-sectional data (the number of countries) is significantly more than the time series data (the number of periods). The countries of interest for this current paper are 34 while the period is 10 years. Moreover, the technique deals with the proliferation of instrumental variables as well as controlling for the persistence of the dependent variables. The argument for persistence in the dependent variables is that the previous year's sustainable development tends to influence that of the current year. Adding to this, Agyei et al. (2020) contend that if the correlation between the regressand and its lag exceeds 0.80, then the former is persistent. About this study, the correlation between sustainable development (SD) and its lag (L.SD) is 0.9246. Additionally, the technique tends to account for the possible endogeneity problem or bias resulting from the potential reverse causality between the explained and explanatory variables and time-invariant omitted variables and account for it using instrumental variables (Tchamyou, 2020;Agyei et al. 2021). Lastly, it controls for the problem of unobserved heterogeneity and reduces the overidentification of instruments and cross-sectional dependence (Agyei et al. 2020). The general system GMM equation is specified as follows: where τ represents the autoregression coefficient, which is one in the models specified while λ, μ, and δ represent country-specific effects and time-specific factors respectively.
Aside the GMM, the researcher could have equally employed other panel estimation techniques such as pooled ordinary least square (POLS), pooled mean group (PMG), two-stage least square (2SLS), and fixed and random effect. However, GMM has been disclosed to have some advantages over these estimators. The POLS is not the best method because it does not account for heterogeneity among panels (Hill et al. 2012) and violates one of the assumptions of no autocorrelation in the traditional linear regression model. The PMG as a cointegration model estimates the long-run relationship among variables. Though it uses lags of the variables because of its autoregressive nature (Pesaran et al. 1999), it requires panel models with more time series observations than cross-sectional which may not be appropriate for this study. Concerning fixed and random effects, the assumption of the current value of the dependent variable being completely independent of its past values is unrealistic which leads to endogeneity arising from unobservable heterogeneity (Gujarati and Porter 2009;Bell and Jones 2015).
The GMM technique is superior over 2SLS in the sense that the instrumental variable estimates are retrieved from lagged values which eliminates the need for an external instrument as required in 2SLS (Roodman 2006).

Diagnostic tests
To test the potential overidentification problem, the technique utilises the Sargan test of overidentifying restrictions with the null hypothesis as 'overidentifying restrictions are valid'. The null hypothesis of the test implies that all instruments used are valid. It is expected that the null hypothesis should not be rejected. In addition to the Sargan test, the system GMM demands the Arellano-Bond test for serial correlation to be carried out. The null hypothesis is 'no serial correlation'. It is expected that the null hypothesis of no first-order serial correlation in first differences (AR (1) test) be rejected but no rejection of the null hypothesis of no higher-order serial correlation in first differences (AR (2)). The Difference in Hansen Test (DHT) is also employed to test the exclusion restriction of the exogenous variable.

Empirical results
This section of the paper starts with the summary statistics of the variables used, correlation analysis, and discussion of regression results based on the system GMM.

Descriptive statistics
Before any empirical analysis and discussion can be conducted, Idrees (2018) advocated that the descriptive information of the various indicators employed in the study should be displayed for the researcher to know the distribution of the data. Specifically for this study, the mean, standard deviation, and minimum and maximum values are presented in Table 2 below. The results from the table show that sustainable development which is measured as the adjusted net savings (ANS) depicted an average of 6.493 percentage of gross national income (GNI) within minimum and maximum values of − 31.523% and 30.289% respectively. The rate of volatility is 11.223 which is an indication that the level of development in the African continent is widely dispersed with some of the countries being more developed than others as some nations recorded negative ANS. This negative value implies that the current generations themselves are not fully meeting their needs and as such cannot preserve any resource for the future generation. On the various dimensions of sustainable development, it is seen from the table that the environmental dimension which is measured with CO 2 emissions (kg per US$ of GDP) had a mean value of 0.419 kg with 0.265 standard deviations and a minimum and maximum values of 0.1 kg and 1.427 kg respectively. It is further observed that the economic sustainability (GNI per capita (US$)) recorded an average value of $2851.864 lying within a range of $224.506 and $16416.179 with 3092.992 standard deviations. This is an indication that for the sampled countries, the per capita income is low and highly dispersed which could to some extent be due to the fact that most of countries are low-income nations with higher population growth rate. The social dimension which is mainly concerned about investment in human capital averaged 16.367% of total expenditure which lies within a boundary of 5.131 to 37.521%. This implies that the expenditure the governments of the sampled economies incur on education is very low since the average value is even lesser than half of the maximum value. This means that as some of the nations within the continent are putting initiatives in place to advocate the need for formal education, others are still lagging behind and probably prioritising on other sectors. In respect of the independent variables, the first indicator for financial outreach (FOUT1) which is bank branch penetration averaged 9.126 which indicates that for every 100,000 adults in the sampled countries, there are only 9 commercial bank branches they can have access to. This would deter more adults to access these banks since there would be more queues which would distort the smooth running of their operations. The second indicator which is credit information sharing recorded a mean value of 10.029% with a minimum value of 0 and highest value of 67.3%. The volatility level of 17.921 reveals that there is wide variation in the number of individuals or firms listed by a private credit bureau with current information on repayment history, unpaid debts, or credit outstanding across the sampled countries as in some countries, these credit bureaus recorded nothing. Financial innovation (FINN) which is the last regressor had an average value of 0.022% with − 0.74% and 4.313% as the lowest and highest values respectively. A low mean value of 0.022% suggests that banks in these economies are not financially innovative enough. This is because the negative values in their growth prospect depict their inability to reap more profit probably as a result of the use of less sophisticated technology to screen out borrowers.
Relative to the control variables, the results revealed that the rate of inflation averaged 7.5% signifying that the inflation rate in some of the countries has relatively been on the decrease since some recorded a negative value while bank sector development had an average figure of 27.962% of GDP between a range of 5.8 and 106.26% of GDP. Bank concentration recorded an average of 71.948% with a wide range of 32.521 to 100% signifying that the banking industry in the sampled countries is fairly concentrated. Natural resource rent to GDP had an average value of 8.617% with 7.427 standard deviations suggesting that there is high level of dispersion in the natural resource endowment in the sampled nations. Again, the results revealed that majority of the economies in the African continent are not rich in natural resources as some even have as low as 0.001% of GDP. Bank return (BR) which describes the efficiency and soundness of the banking industry averaged 1.742% with the lowest value being − 3.185% and highest value being 4.701%.

Correlation analysis
The correlation matrix for the variables used in this study is presented in Table 3. A thorough examination of the table reveals that there is a strong positive connection (0.925) between the dependent variable (SD) and its lag which is even more than the threshold of 0.80, making it suitable to employ the system GMM (Tchamyou, 2020). This high correlation coefficient suggests that the level of persistency in the dependent variable is very high.
The individual sustainability dimensions exhibited weak correlation with the composite sustainability measure. Albeit the weak correlation, they had positive connection except the social dimension that had inverse association. Additionally, a cursory observation of the correlation matrix unveils that there is generally weak correlation among all the variables used in the study with the exception of bank sector development which exhibited moderate association with both the economic dimension and the first indicator for financial outreach, thus, 0.504 and 0.528 respectively. Moreover, the first indicator of financial outreach (bank branch penetration) exhibited a strong positive association (0.736) with the economic dimension of sustainable development. These associations among the variables do not pose any problem of multicollinearity since they are all lesser than the cutoff point of 0.90 as suggested by Adam (2016).

Discussion of regression results
The GMM results are presented in Tables 4 and 5. Table 4 presents the findings of objective one which seeks to assess the relationship between financial outreach and sustainable development and two which investigates the link amidst financial innovation and sustainable development. The last objective's findings are presented in Table 5. Models 1, 3, 5, and 7 of Table 4 as well as models 9, 11, 13, and 15 of Table 5 display the results when bank branch penetration (FOUT1) was utilised as the measure of financial outreach and credit information sharing was used as the second measure of financial outreach in the remaining models (models 2, 4, 6, 8, 10, 12, 14, and 16) in their respective tables. In addition, the study treated each dimension of sustainable development (environmental, economic, and social) as dependent variables in separate models aside from the main dependent variable (sustainable development). This was done to check the influence of the explanatory variables on the individual dimensions for appropriate recommendations.
The results from the two tables revealed that the lags of the explained variables significantly influence their current values across all the models at 1% significance level. By intuition, it is worthwhile to espouse that an economy's level of development largely depends on its previous level of development. This agrees with Liu et al. (2022) that past economic and environmental performance affects the current ones.

Financial outreach and sustainable development
In assessing the impact of financial outreach on sustainable development, two measures of financial outreach were utilised as it is believed that different indicators may have different influence on sustainability. The results from columns Table 3 Pairwise correlation analysis ***, **, and * represent 1%, 5%, and 10% significant levels respectively D denotes sustainable development, ENV represents environmental dimension, ECON represents economic dimension, SOC denotes social dimension, FOUT1 and FOUT2 are the first and second measures of financial outreach respectively, FINN denotes financial innovation, INF is inflation, BSD denotes bank sector development, BC is bank concentration, NRR is the natural resource rent, and BR is bank return     Table 5 Moderation results ***, **, and * represent 1%, 5%, and 10% significant levels respectively and standard errors are in parentheses  1 and 2 of Table 4 uncover that there are both positive and inverse relationships between the two variables depending on the indicator used to measure outreach. In column 1, it could be observed that a 1% rise in commercial bank branches would result in sustainable development increasing by 0.216%. The reason being that if more bank branches are opened, more people will get access to the financial system thereby providing them with the avenue to benefit from affordable financial products and services like credit facility and savings which help them smooth their consumption patterns and handle negative financial shocks. When these individuals patronise the products, they might be able to create microbusinesses which would make them be able to cater for the educational expenses of their wards and also attend to proper health care. Moreover, when people get access to financial services, it tends to minimise income disparity and poverty for both the present and future generations in the economy, hence improving the living condition of people. This is so because as access to formal financial system is said to increase competitiveness (Mushtaq and Bruneau 2019), it lowers the cost of intermediary services, hence enabling more potential entrepreneurs to obtain loans to create new jobs. Another possible explanation to be given to the direct relation is that, as in any other organisation that wishes to enter a new market comes out with strategies such as performing corporate social responsibilities for easy acceptance, banks also undertake CSR activities when expanding their branch operations. Thus, social responsibility, by boosting the returns of the banks through larger customer base, can also help improve the living condition of the society. The implication is that countries in the African continent ought to improve access to financial services in their quest to achieve SDGs of zero hunger, poverty reduction, higher economic growth, among others. This agrees with the hypothesis that financial outreach contributes to sustainable development in Africa.
On the other hand, model 2 of the same table reveals that financial outreach measured with credit information sharing has a significant negative relationship with sustainable development at 5% significant level. This implies that an increase in the number of people or companies that credit bureaus report information on their outstanding loans and repayment history would lead to a 0.124% reduction in sustainable development. The idea behind this measure is that it is expected that as these bureaus share credit information about individuals or firms, it gives them the opportunity to benefit from the financial system by accessing more credit from financial institutions for productive activities. As the people engage in productive activities, it increases their income levels and improve their quality of life. However, the result from model 2 proves otherwise and the reason could somewhat be due the fact that, as these individuals get access to financial services, they venture into unproductive activities that do not benefit the larger society in terms of employment in the long run.
Another possible reason could be that as they get access to the funds, they consume products that are energy intensive thereby emitting more carbon which can be detrimental to the health of other people. Kusi et al. (2016) posit that banks improve their profitability level through the services of Credit Referencing Bureaus (CRBs) since CRBs are specialist organisations that collect credit data and give inexpensive creditworthiness reports on individuals for use in making credit or loan decisions. This enables banks to incur the lower cost in evaluating, choosing, and keeping track of borrowers, hence boosting their profits. So, the inverse relationship per the results could mean that banks are not playing their role in helping the development of the economy from the profit they generate through credit information sharing, in terms of their failure to pay the right amount of taxes due to them or undertake their CSR to benefit the society they operate in. The finding somewhat agrees with the hypothesis that outreach affects sustainable development but in a negative manner.

Financial outreach and environmental sustainability
From the perspective of the dimensions of sustainable development, the findings from models 3 and 4 show that financial outreach has significant and insignificant negative influence on carbon dioxide emission respectively. This indicates that as more people get access to the formal financial system, they tend to emit less carbon dioxide through their various activities and hence promote environmental sustainability. The significant negative connection suggests that a percentage increase in commercial bank branches leads to 0.0014% reduction in CO 2 emission. This could possibly mean that as people and business organisations have access to funds through their bank accounts, they invest more in green technology innovation which contributes to the improvement in environmental quality. More so, the availability and affordability of financial services can encourage the adoption and usage of clean energy production and consumption practises that lower the need to burn fossil fuels such as coal, oil, and gas which produce heat-trapping gases and so reduce CO 2 emissions. This is achieved since some credit facilities have terms and conditions that frown on the use of non-renewable sources of energy that cause global warming.
The finding is consistent with the notion of the environmental Kuznets curve theory and other researchers like Liu et al. (2021), Qin et al. (2021), and Zaidi et al. (2021) who argued that easy access to finance promote environmental sustainability through the reduction in carbon dioxide emissions. The result however contradicts with the argument of Liu et al. (2022) and Mehmood (2021) that easier access to financing promotes manufacturing operations and enhances households to be capable to acquire more energy-intensive commodities like air conditioners which have a tendency to produce more carbon emissions and cause environmental degradation.
The reason for the insignificant relationship between financial outreach through credit information sharing and environmental sustainability could be that majority of the African countries do not have CRBs and the few that have report credit information on limited number of the population. This implies that, if lenders do not have access to this information, they may be hesitant in granting funds to individuals and firms to invest in green technology. Another possible explanation for the insignificant link between financial outreach and environmental sustainability is that banks may hesitate to finance newer, perhaps cleaner technologies that could depreciate the value of the collateral supporting existing loans, which are mostly secured by older, potentially dirtier technologies since they have been generally disclosed to be technologically conservative (Minetti 2011).
Additionally, banks may be unwilling to fund innovations that involve green technologies especially when they are human capital and intangible asset-related because of the difficulty in collateralizing such intangible assets due to their limited ability to be used elsewhere (Carpenter and Petersen 2002;Hall and Lerner 2010b). This supports the assertion of Odhiambo (2020) that banks might be less suited to promote environmental sustainability.
Financial outreach and economic sustainability The findings reveal from columns 5 and 6 that financial outreach has positive influence on economic sustainability. This means that financial outreach stimulates economic growth in the sense that it eases lending restrictions on households and producers for economic activities in the society. This is because as lenders get complete information about borrowers, they would be willing to lend credit to individuals without constraints or requesting for collateral. Behr and Sonnekalb (2012) document that information sharing makes it easier to grant credit to low-income but creditworthy borrowers without collateral since inaccurate information results in credit rationing and collateral requirements. Moreover, poor individuals become less susceptible to the negative effects of poverty if they have greater access to financial services which will lead to a rise in their standard of living, hence enhancing the nation's per capita income and overall economic growth. The finding is supported by the theory of Aghion and Bolton (1997) that easy access to finance results in higher income level and low unemployment rate through the expansion of existing projects or setup of new industrial activities which enhance the economic growth of an economy. In the same vein, the finding is in line with the results of Le et al. (2019) and Chatterjee (2020) that access to the financial system spurs economic development by boosting investment in the manufacturing sector.
Financial outreach and social sustainability The relationship between financial outreach and social sustainability is captured in models 7 and 8, and the results show that financial outreach negatively influences social sustainability. This suggests that as people get access to financial services, the level of human development reduces. The intuition is that as vulnerable and low-income individuals within the society are expected to save and keep their wards in school for quite a long time due to access to inexpensive financial services, they tend to consume luxurious products which may be harmful to their health. The possible explanation that could be given based on the measure for social sustainability (expenditure on education) is that when people get loans, they may use them as business start-ups or expand their business which increases the amount of taxes the government gets from the organisations and the employees for developmental projects such as education.
However, due to corruption and personal interests, the quality of the projects could be undermined because investment into resources that would improve the betterment of the programmes may be channelled elsewhere. Since expenditure on education is essential to human capital development which is a major component of human development (Matekenya et al. 2020), governments of African countries have to invest more in education because it increases the number of skilled labours and enable people to be responsible about their health. The results disagree with the arguments of Nanda and Kaur (2016), Raichoudhury (2016), Anderson et al. (2019), and Dutta and Singh (2019) that access to finance has direct relationship with human development.
On the other hand, the result from model 7 unveils that bank branch penetration has insignificant impact on social dimension of sustainable development. This is consistent with the findings of Ahmed (2013) and Menyelim et al. (2021) that, as a result of the insufficient financial facilities in SSA economies, commercial bank branches per 100,000 adults insignificantly affect human capital development. This has become an issue of concern to policy makers because of the failure of the banking industry in the region to give appropriate assistance for the expansion of banking network (Taddese and Abebaw 2021).

Financial innovation and sustainable development
In addressing the influence of financial innovation on sustainability, the results from all the models reveal that financial innovation influences sustainable development and its dimensions negatively. This inverse relationship means that as banks' net interest margin increases, the rate at which economic activities boost which results in economic growth declines, carbon emissions rise which leads to environmental degradation, and human development in terms of individuals' decision to stimulate quality education, healthy life, and increased quality of life as well as political freedom would be trampled upon. This to some extent causes the wellbeing of present and future generations to be undermined since they might not have the opportunity to live their lives to the fullest as a result of income and gender inequalities and poverty.
This may be ascribed to the fact that as innovation revolves, banks become more efficient in screening good borrowers out of the pool of borrowers due to the use of advanced technologies which could result in growth in net interest margin (Rousseau 1998). The use of expensive innovations may cause the banks to charge higher interest rates which could deter people from accessing credits for productive activities and investment in education and proper health care. Furthermore, the inability of individuals to secure loans at a higher rate may cause them to be continually using fossil fuels that emit more carbon dioxide thereby causing environmental degradation.
A closer look at the results unveils the relationship in all the models are significant except models 3 and 7 which recorded insignificant relationship. The reason being that banks are still using the traditional means of banking and the new innovations they bring on board only reduces the number of minutes people spend in queues in the banking hall and not necessarily development. As African banks are not highly inclined in technological innovation as compared to developed nations, it is prudent to state that the level of development may not be dependent on how innovative these financial institutions are. The result is not surprising as Ajide (Ajide 2016) found that financial innovation has an insignificant connection with development.

Financial innovation and outreach serving as moderating variables
The last objective of this study is to investigate whether financial innovation and outreach can act as moderating variables on the relationship between finance and sustainable development in Africa. The objective was accomplished by interacting each of the proxies of financial outreach with financial innovation to get two additional interacting variables (FINNOUT1 and FINNOUT2). To experience the presence of a moderating effect in a given model, Jose (2013) proposed that the coefficient of the interaction term must be statistically significant. The results are presented in Table 5.
The results revealed that some of the coefficients of financial outreach indicators have reduced as compared to the ones in Table 4 in the presence of the interaction term. This could possibly suggest that even though financial outreach targets the vulnerable group of the society, the introduction of innovative products may not be their motive of getting access to formal financial system because of their little or no knowledge about such innovation. Financial innovation as the other independent variable has been observed to have had an improvement at the introduction of the interaction term. As compared to the results in Table 4, though financial innovation still has unfavourable impact on sustainable development, the negative impact has reduced. SD denotes sustainable development, ENV represents environmental dimension, ECON represents economic dimension, SOC denotes social dimension, FOUT1 and FOUT2 are the first and second measures of financial outreach respectively, FINN denotes financial innovation, FINNOUT1 and FINNOUT2 are the interaction terms, INF is inflation, BSD denotes bank sector development, BC is bank concentration, NRR is the natural resource rent, and BR is bank return. Net effects A and B are the marginal effects when financial innovation and financial outreach were used as moderating variables respectively It is apparent from Table 5 that the coefficients of the interaction terms are significant in models 10, 11, 12, 14, and 15 at 5% significant level indicating that both financial outreach and innovation can be applied as moderators in the study. The impact (both positive and negative) of financial outreach and financial innovation on sustainable development has reduced as compared to the results in Table 4. This means that the introduction of the interaction term divulges the actual impact of the financial system towards sustainable development.
In view of this, we further determined the net effects of the explanatory variable on the explained variable. The formula employed by Abeka et al. (2021) and Idun (2021) which determines the net effect by partially differentiating the dependent variable with respect to the independent variables was used. The formula is specified as where FOUTit denotes each of the measures of financial outreach used in Table 5.
The partial differential of FOUT1 in model 10 is calculated as The 0.022 is the mean of the moderating variable, thus FINN. This process was repeated to get the net effect for models 11, 12, and 15. However, since the dependent The results explain that though the interaction term between FOUT2 and FINN was positive, it produced a negative net effect of − 0.0171 as compared to − 0.124. A further look at the models 11 and 12 reveal that the unconditional effects of FOUT1 and FOUT2 on ENV are − 0.0014 and − 0.0003 as compared to the conditional effect of − 0.0017 and − 0.00035 respectively. Again, the marginal effect of FINNOUT1 and FINNOUT2 in model 14 was seen to be 0.000869 while the unconditional effect produced a beta of 0.0030. Lastly, as compared to the unconditional effect of FOUT1 (− 0.038) on SOC, the conditional effect produced an improved beta (− 0.00247), albeit negative.
The results indicate that the presence of the interaction variable in each of the models produced a greater marginal effect as compared to the unconditional effects in the baseline models, with the exception of models 11,12, and 14. Based on the claim made by Rousseau (1998) that innovation is the catalyst for financial depth to have a better impact on the economy, it was anticipated that innovation in the financial system would quicken the outreach process. However, the presence of the interaction term reduces the effect of financial outreach on sustainable development and its dimensions though the significant coefficients of the interaction terms are positive. The intuition behind this is that since financial innovation is conceptualised in this study as the use of advanced technology to screen borrowers which would translate into growth in net interest margin of the financial institutions, as the banks charge high interest rate on credits because of how expensive the technology might be, people would be hesitant in accessing funds from them. As financial outreach targets the underserving group of the society mostly with limited income and no collateral (Meyer 2019), a higher rate of interest would deter them for assessing loans for economic activities.
From the perspective of the proponents of the diffusion of innovation theory, it is implied that innovation would have impact on the economy if it spreads out from its point of creation to a widespread coverage. Financial outreach makes this possible by spreading innovation to the vulnerable groups who were not previously part of the financial system. The results in Table 5 concerning the net effect B show that when financial outreach was treated as a moderating variable in model 10, the conditional effect of FINN is − 0.9280 while the unconditional effect is − 5.988 in model 2. In models 11 and 12, it is realised that the conditional  Table 4. Again, the conditional effect of financial innovation on economic sustainability is 9.0455 as could been seen in model 14 whereas the unconditional effect was − 0.0335 in the baseline results. Finally, the marginal effects of FINN in model 15 is 2.2281 with its corresponding unconditional effects of − 0.786. The findings indicate that the interaction in each of the models produced higher marginal effects on financial innovation than in the baseline regression results.
The results suggest that irrespective of the fact that the level of financial inclusiveness is low in Africa which could deter growth and development, it serves as a complementary factor to financial innovation to have an improved relationship with sustainable development and its dimensions. This is seen in the reduction of the negative coefficients of financial innovation in Table 5 and the marginal effects outweighing the original betas in Table 4. Given the foregoing, it is obvious that promoting for an inclusive financial system will create an avenue for innovation introduced by the financial sector to be spread out to various sectors of the economy for its usage to bring about improvement in the living standard of people. This confirms the position of the diffusion of innovation theory.

Control variables
In analyzing the influence of the financial system on sustainable development, other macroeconomic indicators were used as control variables. Among these are inflation, banking sector development, bank concentration, natural resource rent, and bank return. The findings from Tables 4 and 5 reveal that inflation has positive influence on sustainable development at 1% significance level and a mixed relationship with the individual dimensions across the models. The positive nexus among inflation and sustainable development implies that as inflation rate increases, sustainable development (measured with adjusted net savings) rises. Higher inflation leads to inflation uncertainty (Lee 1999) which makes people more uncertain about their future incomes and as such motivate them to save more for precautionary motives.
This relationship is also possible in instances where households wish to keep a certain amount of wealth in relation to their income levels which would lead to higher savings in the presence of inflation. The finding is in line with the uncertainty effect hypothesis and the findings of earlier researchers that inflation has a positive effect on adjusted net savings (Shaw 1973;Giovannini 1985) and disagrees with Koirala and Pradhan (2020) who uncovered that inflation has a significant negative relationship with sustainable development.
Bank sector development from both Tables 4 and 5 has been observed to have a significant negative relationship with sustainable development. It is apparent from the submissions of earlier researchers and theorists that financial development enhances the mobilization of funds by the financial institutions for lending activities through the reduction of transaction costs and provides accurate information concerning the possible investment avenues which boost the income and savings level of individuals. However, the results from this study reveal that, as the banking sector developed, sustainable development diminishes. This could be due to the inadequate regulation and inefficient allocation of limited resources which could be detrimental to the growth and development of the economy. Although the number of research works to compare with is limited, the study contradicts with the findings of Pardi et al. (Pardi et al. 2015) and Koirala and Pradhan (2020) that financial development influences sustainable development positively.
Bank concentration as one of the control variables has an inverse insignificant relationship with sustainable development indicating that the level of development of an economy is not dependent on how competitive its banking industry is. Shaffer (1998) argued that when the banking industry is competitive enough, banks fail to screen borrowers efficiently which makes such credits less likely to be used for productive activities. This is because as the number of new entrants increases, banks fail to perform their role effectively because of fear to lose potential clients to another competitive bank. This is in contrary to the findings of Ajide (Ajide 2016) that effective competition in the banking sector boosts growth and development.
The fourth control variable is the natural resource rents and the study assessed how the natural resource endowment of a nation affects its sustainable development. The results from the tables show that natural resource rent has a significant negative connection with sustainable development. This means that as the natural resources that are meant to generate income for the economy rise, the development of the economy dwindles. This could be resulting from human actions that cause these endowments to be seen as doing more harm than good, as described by the natural resource curse hypothesis, which could be due to weak government and corruption. Another possible explanation is that if the rents emanate from non-renewable resources which are used for immediate consumption other than investment purposes, capital stock of the economy would decrease and future generation might have little or no share of the rents.
The final variable used as control variable is bank return. The results indicate that the level of banks' profitability and efficiency has a negative relation with sustainable development. To some extent, the results could mean that as banks become more profitable, they tend to limit their CSR activities because of the belief that they operate mainly for economic gains. This retards sustainable development since Siueia et al. (2019) opined that CSR activities contribute to the sustainability of the society and economy at large.

Model diagnostics
The two-step system GMM necessitates some diagnostic tests to be conducted. This study conducted the Difference in Hansen Test (DHT), Sargan test of overidentification, and Arellano-Bond test for serial correlation to check the robustness of the results. For all estimations, we could trace episodes of serial correlation (since the p values of the AR(2) results are all greater than 5%). In the token, the instruments employed in the GMM analyses were efficient since the p values of the Sargan and Hansen tests results are all greater than 5%, signifying that the results were not due to revers causality issues. The findings also show that the number of countries in each model is more than the number of instruments which solves the problem of instrument proliferation.

Conclusions, recommendations, and limitations
Attention has shifted from achieving higher economic growth to sustainable development, and as such, the study sought to investigate how the banks contribute in achieving SD in Africa through their outreach initiatives and innovative products. The findings of the study revealed that financial outreach measured by bank branch penetration has significant positive relationship with sustainable development while outreach measured by credit information sharing has significant inverse relationship with sustainable development. Concerning the dimensions, the study further discovered that bank branch penetration and credit information sharing have significant and insignificant negative relation with carbon dioxide emissions respectively, implying that outreach promotes environmental sustainability. It was also discovered that financial outreach enhances economic sustainability while outreach inversely influences social sustainability. The findings implied that if the vulnerable, marginalised, and excluded segment and companies are given the chance to utilise the mainstream banking services, it emboldens them to participate fully in basic healthcare, education, and industrial activities so as to earn income thereby making them capable of enjoying total wellbeing pursuits and freedom.
It was further unveiled that financial innovation has a significant negative link with sustainable development in Africa, which suggests that due to the innovation, many people would be rendered unemployed thereby reducing the labour force of the continent. Lastly, the findings revealed that both financial outreach and innovation serve as moderating variables in the finance/development nexus. It was found that, though people are lured into the formal financial system when there exist innovative products, the introduction of innovation into the financial sector reduces the impact financial outreach has on environmental and economic sustainability in Africa. It is concluded that since the poor who are the focus of financial outreach are not knowledgeable about technological advancement, the introduction of innovation may not lure them into the financial system. Also, an economy that is financially inclusive serves as a conduit for innovation to have impact on sustainable development. This suggest that the benefit of financial innovation would not be felt if the economy does not foster inclusiveness in the financial system.
We recommend that for African countries to realise appreciable number of the SDGs, governments should keep pushing for wider access to and usage of financial services by providing the excluded group with basic education, income, and healthcare that mostly restrict them from assessing the services of these financial institutions. The study also recommends that policy makers and governments of various African nations should collaborate with the financial service providers to guarantee reasonable, flexible, and attractive interest rates on loans to the underprivileged, deprived segment of the society, and vulnerable businesses so as to smooth their consumption and expand their business. Moreover, the governments should provide some incentives to the banks to reduce their cost of operation and motivate them to continually embark on CSR activities that are vital to the wellbeing of the society especially the marginalised ones. Additionally, the financial institutions should not focus operational activity solely on sectors of the formal economy and ignore the local population and small and medium-sized businesses that are typically active in the informal sectors of the economy. Finally, since financial outreach serves as a conduit for innovation to influence development, policy makers should increase the level of awareness and literacy of the availability of new innovations in the financial system particularly to the marginalised for their usage.
The study was constrained by the difficulty in getting data on the variables for other African countries. Moreover, the unavailability of data for some countries to some extent narrowed the scope of the study. Notwithstanding, this would not affect the representativeness of the study since the countries used covers more than half of the population. Further studies can be conducted to examine how other nonbank financial institutions contribute to the realisation of the Sustainable Development Goals' target set up for African countries. Moreover, the study can be extended to other developing and developed economies.