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Journal of Financial Services Research

17-05-2024

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

Authors: Amadou Bobbo, Gislain Stéphane Gandjon Fankem, Aurelien Kamdem Yeyouomo

Published in: Journal of Financial Services Research

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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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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.

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.

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.

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

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Title: Determinants of FinTech development: Evidence from Sub-Saharan African Countries
Authors: Amadou Bobbo
Gislain Stéphane Gandjon Fankem
Aurelien Kamdem Yeyouomo
Publication date: 17-05-2024
Publisher: Springer US
Published in: Journal of Financial Services Research
Print ISSN: 0920-8550
Electronic ISSN: 1573-0735
DOI: https://doi.org/10.1007/s10693-024-00427-9