An Assessment of the Role of Fintech and Financial Institutions on the Economic Growth in Sub-Sahara African Countries

This study examined the role of financial technology and financial Institution on the economic growth in Sub-Sahara Africa countries, the introduction of financial technology (FinTech) has had a significant impact on the financial landscape in Sub Saharan Africa (SSA) in recent times, the role of financial institutions on economic growth in the region cannot be overemphasized. This study assessed the extent to which FinTech has helped financial institution and economic growth in the region by utilizing data from 27 financial institutions across all the four region (East, Central, South and West Africa) of 27 SSA economies between 2012 and 2023. The study used covariance-based structural equation modelling method to analysed the data collected. Based on the results, it was revealed that FinTech disruptions have led to an increase in equity capital for financial institutions, while having no impact on deposit and long-term debt financing. The study also reveals that FinTech’s limited size within the financial system has ultimately restricted its effects on economic growth in SSA. Furthermore, the study found no evidence that FinTech was mediating the effect on economic growth through the bank financing channel, indicating that SSA banking systems are able to withstand disruptions from FinTech for financial stability. However, the study recommends that as FinTech continues to evolve and grow, policymakers should remain vigilant and monitor its impact on the financial system and economic growth in the region.