The FinTech-driven Approach to Financial Inclusion: A cross-sectional study of how Financial Inclusion furthers Sustainable Development in Sub-Saharan Africa
Abstract: The UN 2030 agenda for sustainable development acknowledges the essential role of financial inclusion in achieving the Sustainable Development Goals (SDGs) and reducing inequality. African countries have made substantial progress in economic development and financial inclusion over the last two decades, yet there is still considerable need for further development. Financial Technology (FinTech) is a powerful force influencing the structure of financial services in Sub-Saharan Africa (SSA). Fintech is seen as a critical enabler of financial inclusion and viewed as a potential opportunity to deliver financial services to the millions of unbanked across the SSA region. This paper explores the relationship between fintech, financial inclusion, economic growth and income inequality for a panel of 16 SSA countries using data from the Financial Access Survey, the Global Findex database and the World Development Indicators for 2014 and 2017. This study introduces three new indices of financial inclusion for 16 SSA. The indices are used to assess the impact of fintech-driven financial inclusion on economic growth and income inequality. The results provide evidence that fintech-driven financial inclusion is significantly positively related with economic growth and that fintech-driven financial inclusion reduces income inequality.
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