The Impact of Fintech on Financial Inclusion: The Case of Sub-Saharan Africa

Authors: W. Faustin Djoufouet, Thierry Messie Pondie

Affiliations: University of Bamenda, University of Dschang
Abstract Objectives Key findings Conclusion
• Mobile Banking: Analyze the role of mobile Summary: The study demonstrates that fintech has a
The objective of this paper is to determine the impact banking in enhancing financial inclusion by substantial positive impact on financial inclusion in
of FinTech on the financial inclusion of populations in providing accessible financial services to remote Sub-Saharan Africa. Mobile technology, in particular,
sub-Saharan Africa where financial education is still and underserved populations. plays a crucial role in providing financial services to
low. To do so, data were collected on a sample of 35 • Peer-to-Peer Lending: Evaluate the impact of underserved populations.
countries over a period from 2011 to 2020. Estimates peer-to-peer lending platforms on access to credit Future Directions: Future research should focus on
were made using two-stage least squares models and for individuals and small businesses. identifying and addressing the barriers to fintech
the Lewbel 2LS model. It is clear from the results that
• Digital Payment Systems: Assess the effect of adoption, such as regulatory challenges and digital
fintech contributes significantly to the financial
digital payment systems on reducing transaction literacy issues. Policymakers should work towards
inclusion of people in sub-Saharan Africa. Mobile
costs and increasing convenience for users. creating an enabling environment for fintech
phone ownership facilitates the use of financial
Research questions innovation.
services. It is noted that a 1% increase in the number
of people using a phone would contribute to a 0.67% • How has mobile banking improved financial References
Increased Access to Financial Services: The study
increase in the financial inclusion rate. The Driscoll- inclusion among remote and underserved
found that mobile phone ownership significantly
Kraay technique consolidated these results by populations? 1.Djoufouet, W.F., & Pondie, T.M. (2022). Impacts of
facilitates the use of financial services. A 1% increase
showing that with 1% of people. • What impact do peer-to-peer lending platforms have FinTech on Financial Inclusion: The Case of Sub-
in mobile phone usage results in a 0.67% increase in
on access to credit for individuals and small Saharan Africa. Copernican Journal of Finance &
financial inclusion rates.
businesses? Accounting, 11(4), 69-88.
Reduced Costs: Fintech solutions, particularly digital 2.Demirgüç-Kunt, A., et al. (2018). The Global Findex
• How do digital payment systems reduce transaction payment systems, have reduced transaction and Database 2017. World Bank Group.
costs and increase convenience for users? operational costs, making financial services more 3.Gabor, D., & Brooks, S. (2017). The Digital
affordable for low-income populations. Revolution in Financial Inclusion. New Political
Improved Efficiency: Fintech innovations have Economy, 22(4), 423-436.
improved the efficiency of financial service delivery, 4.Suri, T., & Jack, W. (2016). The Long-Run Poverty
leading to faster and more reliable transactions. and Gender Impacts of Mobile Money. Science,
354(6317), 1288-1292.
Innovative Products: Fintech has introduced new
financial products, such as microloans and insurance, Acknowledgement
Introduction Source: https://www.bing.com/images/ tailored to the needs of underserved populations.
Fintech, which includes mobile banking, peer-to-peer Methodology This poster was possible because of the work of W.
lending, and digital payment systems, is Faustin Djoufouet and Thierry Messie Pondie and the
Data Collection: Data was collected from 35
revolutionizing financial services by making them help from Maneya tembo and Dali-neya Solutions
countries in Sub-Saharan Africa over the period from
more accessible, efficient, and affordable.1 Limited
2011 to 2020. The data includes indicators of mobile
Importance of financial inclusion phone ownership, fintech adoption rates, and financial
▪ Financial inclusion is essential for reducing poverty inclusion metrics.
and boosting economic growth. Analytical Methods: Two-stage least squares (2SLS)
• In Sub-Saharan Africa, where financial education is models and Lewbel 2SLS model were used to
low, fintech has the potential to bridge the gap and estimate the impact of fintech on financial inclusion.
provide financial services to the unbanked These models help address potential endogeneity
Vincent Sakala
population. issues in the data. [email protected]