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Seminar - Financial technologies paving a bright new path for the world’s unbanked population

  • S311 (Paul Webley Wing), SOAS University of London (map)

Speaker: Professor Victor Murinde, AXA Chair in Global Finance, SOAS University of London


Globally, the FinTech revolution is in full swing. However, while we know now that FinTech plays a pivotal role in facilitating access to financial products and services, there are two serious gaps in knowledge: (1) Existing literature has not attempted to identify the crucial country characteristics which facilitate the use of FinTech; (2) current research does not explain how FinTech affects financial inclusion and sustainable economic development (SED). In this paper, we attempt to address the two gaps. We seek to identify the key country characteristics which facilitate the use of FinTech and how FinTech works through financial inclusion to drive SED. We invoke a sequential simultaneous equation system, to specify and estimate a 3SLS regression model using data from 62 developing countries. Our results identify the quality of infrastructure and business ecosystem as the two main country characteristics that facilitate the use of FinTech. Moreover, our evidence uncovers a stable positive effect of the use of FinTech on financial inclusion; further, we find a strong link from financial inclusion to SED. These findings are robust to additional testing for the ‘demand effect’ of financial inclusion and for ‘reverse effect’ between financial inclusion and SED.

Keywords: FinTech, financial inclusion, sustainable economic development

Co-authors: Joris J.A. Wolbers, University of Groningen; Robert Lensink, University of Groningen