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Determinants of FinTech development: Evidence from Sub-Saharan African Countries

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Abstract

In this study, we empirically assess the determinants of FinTech development for a sample of 28 Sub-Saharan African (SSA) countries over the period from 2007–2018. The results show that: financial development, literacy, regulation, and economic growth positively affect FinTech development; institutional quality and inflation negatively affect it; literacy is the most important determinant contributing to FinTech development; and institutional quality the greatest impediment to FinTech development. These results indicate that literacy and the level of financial education require more attention in SSA. Likewise, the ongoing financial reforms and the implementation of a regulatory framework contribute to FinTech development in SSA.

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Data availability

The datasets in this current study are not publicly available but are available from the corresponding author on reasonable request.

Notes

  1. Financial Stability Board (2017) defines FinTech as technology-based financial innovation that can give rise to new business models, applications, processes, or products and has a significant effect within the financial system.

  2. Arner et al. (2015) describe FinTech development as a continuous process in which finance and technology develop and lead to numerous incremental innovations such as online banking, mobile payments, crowdfunding, peer-to-peer lending, robo-advice, and online identification.

  3. Angola, Botswana, Burkina Faso, Cameroon, Democratic Republic of Congo, Republic of Congo, Côte d'Ivoire, Ethiopia, Gabon, Gambia, Ghana, Guinea, Guinea Bissau, Kenya, Liberia, Madagascar, Malawi, Mali, Mozambique, Namibia, Niger, Nigeria, Senegal, South Africa, Tanzania, Togo, Uganda, and Zambia.

  4. Kaiser (1974) recommends deleting factors whose eigenvalue is less than one.

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Acknowledgements

We thank Nagpurnanand Prabhala (The editor) for his extraordinary generosity in providing many comments that greatly helped improve our manuscript and anonymous referees for many most helpful comments. We also appreciate the helpful comments and sincere assistance of Caroline Magne Foasso, Séverin Tamwo and Hamed Salim Yazid.

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  1. University of Yaoundé II, PO.BOX, 1365, Yaoundé, Cameroon

    Amadou Bobbo, Gislain Stéphane Gandjon Fankem & Aurelien Kamdem Yeyouomo

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  1. Amadou Bobbo
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Correspondence to Aurelien Kamdem Yeyouomo.

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Bobbo, A., Fankem, G.S.G. & Yeyouomo, A.K. Determinants of FinTech development: Evidence from Sub-Saharan African Countries. J Financ Serv Res (2024). https://doi.org/10.1007/s10693-024-00427-9

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