FinTech and Financial Inclusion in Sub-Saharan Africa: A Comparative Analysis

Abstract

The UN 2030 agenda for sustainable development underscores the crucial role of financial inclusion in achieving the Sustainable Development Goals (SDGs). The rapid evolution of FinTech innovations is significantly reshaping the global financial industry and facilitating mobile phone efforts to promote financial inclusion. This technological advancement is projected to foster stability within the financial system, mitigate poverty rates, reduce income inequality, and stimulate economic growth. This study evaluates the impact of mobile FinTech on financial inclusion in 18 Sub-Saharan African (SSA) countries using data from the Global Findex database for 2014-2021, as well as the World Development Indicators database. The research employs principal component analysis (PCA) to construct a financial inclusion index and uses random effects, fixed effects, panel corrected standard errors (PCSE), and generalized method of moments (GMM) models. The empirical findings reveal that mobile FinTech significantly enhances financial inclusion, with the payment component of mobile FinTech having a greater impact than mobile money accounts.