The macroeconomic drivers of fintech development in emerging markets: an empirical investigation

Abstract

This research analyzes how macroeconomic variables shape financial technology development across 34 African economies during 2015–2022. Based on a panel econometrics, we assess the impact of GDP per capita, currency exchange rate, price stability, international trade integration, and investment flows on digital finance adoption in Sub-Saharan and North African contexts. Two distinct measures of FinTech development are employed: the population of adults who have mobile money accounts for storage purposes and the population of adults who use their mobile accounts for active financial transactions. The findings show that GDP per capita, the exchange rate, and trade openness significantly enhance FinTech adoption, while the effect of inflation varies across estimation methods. Robust econometric techniques, including fixed effects and bias-corrected fixed effects models, are employed to address potential endogeneity concerns. Our results underscore the unique role of macroeconomic stability and market openness in fostering digital financial innovation in emerging economies. These insights offer valuable implications for policymakers aiming to balance financial innovation with economic stability in African markets.

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