1Micheal A. Omogboye; 2M. Popoola-Adebayo, PhD
Department of Banking & Finance
Yaba College of Technology
Abstract
This study applied panel data econometric techniques to analyze the relationship between Fin-tech adoption, financial inclusion, and economic stability across 35 African economies from 2010 to 2023. Using Fixed Effects (FE), Random Effects (RE), and Generalized Method of Moments (GMM) estimations, the study examines how Fin-tech penetration influences bank account ownership, digital payment adoption, and financial resilience, while mitigating inflation volatility, investment inefficiencies, and trade vulnerabilities.
Empirical findings show that a 1% increase in mobile money penetration leads to a 0.21% rise in formal financial inclusion (p < 0.01), with the strongest effects observed in Kenya, Ghana, and Nigeria. Additionally, Fin-tech expansion reduces inflation volatility and enhances investment efficiency, particularly in well-regulated Fin-tech environments like Egypt, Rwanda, and Morocco. However, regulatory inconsistencies and economic instability limit Fin-tech’s stabilizing effects in high-risk economies such as Zimbabwe and Sudan.
The study concludes that Fin-tech adoption is a crucial driver of financial deepening and macroeconomic stability in Africa. To maximize its impact, policymakers should focus on regulatory harmonization, cross-border Fin-tech integration, and inflation control strategies to support long-term economic growth.
Keywords: digital transactions, economic stability, Fin-tech adoption, financial exclusion, financial inclusion