Impact of Fintech on Economic Growth: Evidence from African Countries

Abstract

This research aims at examining the impact of fintech in economic growth with evidence from African Countries. To draw the impacts, data from several African countries had been compiled using a cross-sectional, explanatory and comparative approach. Sample of various countries such as Kenya, Ghana and Nigeria have been included to examine the topic. The data was obtained through secondary data from Organization, research papers and other official bodies. The findings showed that there is a positive correlation between fintech adoption and economic growth in African countries example expanded access to financial services, job opportunities and improved financial inclusion. Furthermore, some ramifications have been provided for companies, players, and legislators working in Africa\'s fintech and economic development industries. The research has included some of the drawback or hinderances that occurred during the research and some suggestions have been included to shade some light to future scholars that would be researching on a similar topic.

Introduction

Financial technology (fintech) in developing countries, especially Africa, has grown rapidly, playing a crucial role in economic development by improving financial inclusion for underserved populations. Innovations like mobile banking, digital payments, peer-to-peer lending, and blockchain have expanded access to credit, savings, and investments, which helps boost economic growth.

Despite this progress, many Africans remain unbanked due to infrastructure challenges, high fees, and legacy banking systems. However, mobile phone and internet access improvements have made fintech a promising solution, notably in countries like Kenya, Nigeria, South Africa, and Ghana.

Research gaps:
Current research is limited, focusing mostly on specific countries or technologies without comprehensive cross-country analysis or strong empirical evidence linking fintech adoption to broad economic outcomes such as GDP growth or poverty reduction. There is also insufficient attention to regulatory impacts, risks like cybersecurity, and the digital divide.

Study objectives:
The study aims to explore how fintech adoption affects economic growth, employment, and financial inclusion across African countries. It also examines the role of policies and regulations in supporting fintech, identifies key challenges, and provides recommendations for maximizing fintech’s sustainable economic benefits.

Literature review highlights:

• Fintech can reduce income inequality by improving access to loans and financial services, as seen with mobile money services like M-Pesa.

• Fintech startups are growing rapidly, offering cheaper transactions, better savings returns, and social benefits in sectors like healthcare and agriculture.

• Challenges include infrastructure limitations, regulatory complexity, and cybersecurity threats.

• Mobile banking and peer-to-peer lending have notably improved financial inclusion and economic activity, especially in rural and informal sectors.

• Blockchain technology may enhance transparency and reduce corruption, supporting long-term growth.

Research framework:
The framework links fintech adoption (digital payments, mobile banking, lending) to economic growth, poverty reduction, and job creation, moderated by factors like regulatory environment and digital infrastructure. Supportive policies and better infrastructure enhance fintech’s positive impact, fostering financial inclusion and broader economic development.

References

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Copyright

Copyright © 2025 Specioza Evodius Ndibalema, Anand Kadia. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.