Financial Technologies (Fintech) and Financial Development in Nigeria

Abstract

A developed financial sector plays critical roles in economic growth of nations as such it is important to know what determine financial development in a country. This study investigated the impacts of financial technologies on financial development in Nigeria. The study applied Auto-Regressive Distributed Lag (ADRL) estimation technique using quarterly data from 2009 to 2023 for the estimation. Findings indicate that, among the financial technology (fintech) variables, internet banking (IB) has a positive effect on financial development in the long run, but no significant effects in the short run. While, point of sales (POS) exerted a positive effect in the short run but has no significant effect in the long run. On the economic factors included as control variables, inflation rate (IFR) has negative effects on financial development in the short run and positive effects in the long run. Interest rate (INT) exerted negative effects on financial development the long run but no significant effect in the short run. Economic growth (RGDP) positively affects financial development only in the short run but negative effects in the long run. Consequent upon the findings, the study makes the following recommendation: (i). Internet banking should be highly promoted as increment in its usage improved financial development in Nigeria. (ii). Economic and financial policies should be fine-tuned in a way that as the economy grows it will stimulate financial development as against boosting financial development only in the short run but retarded it in the long run. (iii)The government should embark on more programmes and policies that will dampen lending interest as high rate of interest reduces financial development.