The Impact of FinTech Adoption on Traditional Financial Inclusion in Sub-Saharan Africa

Abdul Karim Kamara () and Baorong Yu ()
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Abdul Karim Kamara: School of Insurance and Economics, University of International Business and Economics, Beijing 100029, China
Baorong Yu: School of Insurance and Economics, University of International Business and Economics, Beijing 100029, China

Risks, 2024, vol. 12, issue 7, 1-19

Abstract: This study investigates the impact of FinTech adoption on traditional financial inclusion in 22 countries in sub-Saharan Africa (SSA). The study utilizes the World Bank’s World Development Indicators data and the International Monetary Fund’s Financial Access Survey data. This study employed Principal Component Analysis (PCA) to construct the dimensions of traditional financial inclusion and the overall financial inclusion index. Applying the Generalized Method of Moments estimation technique to annual data spanning from 2004 to 2022, the findings show that FinTech has a negative and statistically significant effect on the geographic and usage dimensions. However, it has a positive and statistically significant impact on the demographic dimension and the overall traditional financial inclusion index. These findings indicate that FinTech does not have a detrimental impact on traditional financial inclusion, which is contrary to the findings of other studies. Therefore, in order to enhance the degree of financial inclusion in SSA, it is important for traditional financial inclusion to effectively utilize FinTech.

Keywords: FinTech; traditional financial inclusion; Principal Component Analysis; Generalized Method of Moments (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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