Financial shocks and savings amongst Africa's middle class: Insights from FinTech data

Jamila Abubakar, Ahmet F. Aysan, Mustafa Disli and Marwa Elnahass

International Review of Economics & Finance, 2025, vol. 103, issue C

Abstract: A significant body of literature suggests the African middle-class's vulnerability to financial shocks. We utilise a unique dataset from a FinTech platform containing detailed savings transactions in Nigeria from 2017 to 2022. Our analysis examines the effect of financial shocks on financial resilience and savings accumulation for middle-income individuals and young people, controlling for demographic and account characteristics. Our findings indicate that financial shocks lead to savings volatility and decreased savings accumulation for these groups. Women, younger people, and people with lower salaries exhibit less volatile savings. We find compelling evidence that non-food shocks have a more significant impact on volatility and dissavings for these sub-groups. These findings highlight the critical role of FinTech platforms in understanding and mitigating the effects of financial shocks and underscore the need for protective policies to enhance financial resilience amidst economic volatility.

Keywords: Financial shocks; Middle-income class youth; FinTech; Financial resilience; Developing economies (search for similar items in EconPapers)
JEL-codes: D0 D1 D14 G01 R11 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:103:y:2025:i:c:s1059056025005775

DOI: 10.1016/j.iref.2025.104414

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