Effect of FinTech on Financial Deepening and Financial Inclusion in Nigeria

Abstract

This study was done to determine the effect of FinTech on financial deepening and financial inclusion in Nigeria. The study used annual data obtained from the statistical bulletin of the Central Bank of Nigeria for the period 2009-2021. The study adopted five (5) models, with two model depicting measures of financial deepening and three models measuring financial inclusion. The values of ATM, POS, Web pay (WP) and Mobile pay (MP) transactions were adopted as FinTech (Independent) variables in all 5 models. While, ratio of private sector credit to GDP (PSC/GDP) and ratio of total savings to GDP (SAV/GDP) were the adopted dependent variables to measure financial deepening in models 1 and 2. Small and Medium Enterprises Credit (SMEcr), Rural Deposits (RD) and Rural Loan and Advances (RL) were typified as measures of financial inclusion in models 3, 4 and 5. Employing the Ordinary Least Square (OLS) regression techniques. Findings of the study showed that; FinTech has no significant effect on the ratio of Private sector credit as a measure of financial deepening in Nigeria, FinTech has marginal significant effect on ratio of savings to GDP as a measure of financial deepening in Nigeria via POS. FinTech has significant effect on SME credit as a measure of financial inclusion in Nigeria, especially via ATM and Web pay. FinTech has significant effect on Rural Deposit as a measure of financial inclusion in Nigeria, specifically through POS transactions. FinTech has no significant effect on Rural Loan and Advances in Nigeria. Thus, the study recommended amongst other that: The government to provide, upgrade facilities and infrastructure that support FinTech in urban, sub-urban and rural communities in Nigeria, government and corporate organization as well as NGOs to provide technical support in the areas of digital/IT literacy to citizens and SME owners and operators in Nigeria.