Fintech, Financial Inclusion and Economic Development Nexus in Sub-Saharan Africa

Abstract

Fintech is proven as an enabler for financial inclusion in the Sub-Saharan African (SSA) economies. This is achieved mainly through the utilisation mobile money accounts in the region. The link between Fintech and financial inclusion and their impact on economic development has not been widely explored. This paper investigates the Fintech, financial inclusion, and economic development nexus in SSA for 33 countries using for the period 2011 to 2021. The study utilised multiple models of pooled ordinary least square (POLS), the two-stage least square (2SLS), Fixed Effects (FE), Random Effects (RE), Fully Dynamic Ordinary Least Squares (FMOLS), and Dynamic Ordinary Least Squares (DOLS) to estimate the relationship between the variables. We found that Fintech is a facilitator of financial inclusion and the relationship between these variables is significant. We further find that financial inclusion positively correlates with economic development, however the relationship is found to be insignificant. We also found that Fintech does not have positively correlates with economic development. Investing on Fintech by economies will assist in enhancing the level of financial inclusion in the region.