IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 10 NO. 10 2024
DOI: 10.56201/jafm.v10.no10.2024.pg207.224

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Fintech for Financial Inclusion: A Framework for Digital Financial Transformation

Okafor Clara N., Ezeamaku Ifeoma J., Anetoh, Vivian C.

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Abstract

Studies exploring the nexus between FinTech and financial inclusion in Nigeria employed the indirect measures of FinTech. Previous studies in this area also adopted a bundle indicator of financial inclusion ignoring the individual indicators effect. This study contributes to the extant literature by expanding the generic FinTech frontier to capture the direct measures (automated teller machine, web pay, mobile banking, and point of sale) and also test the model on Nigeria by unbundling financial inclusion indicators individual index to examine the degree of contribution. The autoregressive distributed lag (ARDL) bounds test cointegration approach was used to estimate the respective equations and find evidence of a long?run nexus between FinTech, financial inclusion, and economic growth. The direct measures of FinTech positively and significantly impact financial inclusion and economic growth. The negative nexus between automated teller machines, financial inclusion, and economic growth can be attributed to the closure of most automated teller machine galleries in bank branches and outside the branches due to, high maintenance costs and insecurity around galleries. This is evident in the long waiting time to use the automated teller machine and the growing number of bank customers further suggests that the current 22,500 automated teller machines are insufficient to enhance inclusive growth in Nigeria. Individual financial inclusion indicators positively impact economic growth while the usage dimension of financial inclusion improves economic growth but not significantly. Also, bank branches had a positive and significant impact on economic growth, and credit to private had a non-significant effect.

keywords:

Financial inclusion; economic growth; FinTech; ARDL; Nigeria

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