FinTech—A pathway to financial inclusion? Evidence from Southern African Development Community member states

Olumide O. Olaoye, Mulatu F. Zerihun, Ali Shaddady and Mosab I. Tabash

African Development Review, 2024, vol. 36, issue 2, 252-265

Abstract: The study investigates the effect of FinTech on financial inclusion in Southern African Development Community (SADC) member states over the period 2011–2021, while also looking at the transmission channels. The study adopts a battery of econometric techniques such as ordinary least squares (OLS), the two‐step system generalized method of moments (GMM) and the Driscoll and Kraay covariance estimator. The study finds that FinTech (proxied by digitization) deepens financial inclusion (access to loan) and a decline in the number of bank branches in SADC member states. This is logical since the operations of FinTech are digital. This implies that an attempt to promote financial inclusion by traditional means such as building physical bank structures may be limited, especially in Africa where large swathes of the populace remain unbanked. As expected, FinTech (measured by automated teller machines [ATMs]) increases the number of bank branches in SADC. We also find that mobile cellular subscription, the share of population with access to electricity and Internet access and mean years of schooling are important transmission channels of FinTech to financial inclusion in SADC. In general, the result shows that FinTech enhances and deepens financial inclusion in SADC member states. The research and policy implications are discussed.

Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/1467-8268.12754

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:afrdev:v:36:y:2024:i:2:p:252-265

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1017-6772

Access Statistics for this article

African Development Review is currently edited by John C. Anyanwu, Hassan Aly and Kupukile Mlambo

More articles in African Development Review from African Development Bank Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().