Influence of Digital Payment Systems on Financial Literacy and Financial Inclusion in Sub-Saharan Africa
DOI:
https://doi.org/10.47941/ijf.3259Keywords:
Digital payment systems, Financial literacy, Financial inclusion, Fintech, Digital financeAbstract
Purpose: The primary aim is to empirically assess whether digital payment systems significantly enhance financial literacy and financial inclusion. The study also explores how macroeconomic and technological factors, such as inflation, education, and internet penetration, moderate these relationships across 35 Sub-Saharan African countries
Methodology: The study employed a quantitative research approach. It used a panel data of 35 out of 49 Sub-Saharan countries based consistency of annual data, spanning from 2000 to 2023. The study employs a two-step System Generalized Method of Moments estimation technique. This method addresses potential endogeneity, autocorrelation, and omitted variable bias while accounting for country-level heterogeneity.
Findings: Results revealed that digital payment systems have no statistically significant effect on financial literacy and, surprisingly, a small negative effect on financial inclusion. Education and internet penetration showed marginal positive influences, though weak. These findings suggested that digital tools alone are insufficient without complementary interventions such as education, trust-building, and infrastructure development.
Unique Contribution to Theory, Practice and Policy: Policymakers and fintech providers should adopt a more holistic, user-centric approach to digital finance—emphasizing not just access but usability, literacy, and long-term engagement. For accounting and development research, the findings highlight the importance of integrating socio-technological dimensions in measuring financial development outcomes.
Downloads
References
Adelaja, A. O., Abikoye, B. E., Nezianya, M. C., & Umeorah, S. C. (2024). Advancing financial inclusion through fintech: Solutions for unbanked and underbanked populations. World Journal of Advanced Research and Reviews, 23(2). https://doi.org/10.30574 /wjarr.2024.23.2.2379
Aker, J. C., & Mbiti, I. M. (2010). Mobile phones and economic development in Africa. Journal of Economic Perspectives, 24(3), 207–232. https://doi.org/10.1257/jep.24.3.207
Andrianaivo, M., & Kpodar, K. (2012). Mobile phones and financial inclusion: Evidence from Africa. IMF Working Papers, 12(73). https://doi.org/10.5089/9781475502410.001
Batista, C., & Vicente, P. C. (2020). Improving access to savings through mobile money: Experimental evidence from African smallholder farmers. World Development, 129, 104905. https://doi.org/10.1016/j.worlddev.2020.104905
Chinoda, T., & Kapingura, F. M. (2023). The impact of digital financial inclusion and bank competition on bank stability in Sub-Saharan Africa. Economies, 11(1), 15. https://doi.org/10.3390/economies11010015
Cnaan, R. A., Moodithaya, M. S., Heist, H. D., & Scott, M. L. (2021). Financial inclusion in the digital banking age: Lessons from rural India. Journal of Social Policy. https://doi.org/10.1017/S0047279421000738
Danladi, S., Prasad, M. S. V., Ghasemi, P., Modibbo, U. M., & Ahmadi, S. A. (2023). Attaining sustainable development goals through financial inclusion: Exploring collaborative approaches to fintech adoption in developing economies. Sustainability, 15(17), 13039. https://doi.org/10.3390/su151713039
Demirgüç-Kunt, A., Klapper, L., Singer, D., Ansar, S., & Hess, J. (2018). The Global Findex Database 2017: Measuring financial inclusion and the fintech revolution. World Bank Report. https://doi.org/10.1596/978-1-4648-1259-0
Ebirim, G. U., & Odonkor, B. (2024). Enhancing global economic inclusion with fintech innovations and accessibility. Finance & Accounting Research Journal, 6(4). https://doi.org/10.51594/farj.v6i4.1067
El-Zoghbi, M., & Tarazi, M. (2013). Trends in Sharia-compliant financial inclusion. CGAP Focus Note, 84. https://doi.org/10.2139/ssrn.2289788
Evans, D. S. (2018). Economic aspects of mobile money: Insights from Africa. Contemporary Economic Policy, 36(2), 243–257. https://doi.org/10.1111/coep.12267
Evans, O. (2015). The effects of economic and financial development on financial inclusion in Africa. Review of Economics and Development Studies, 1(1). https://doi.org/10.26710/reads.v1i1.113
Fernandes, C., Borges, M. R., & Caiado, J. (2020). The contribution of digital financial services to financial inclusion in Mozambique: An ARDL model approach. Applied Economics. https://doi.org/10.1080/00036846.2020.1808177
Gabor, D., & Brooks, S. (2017). The digital revolution in financial inclusion: International development in the fintech era. New Political Economy, 22(4), 423–436. https://doi.org/10.1080/13563467.2017.1259298
Ghosh, S. (2016). Does mobile telephony spur growth? Evidence from Sub-Saharan Africa. Telecommunications Policy, 40(9), 843–857. https://doi.org/10.1016/j. telpol.2016.06.003
Hasan, R., Ashfaq, M., Parveen, T., & Gunardi, A. (2022). Financial inclusion – does digital financial literacy matter for women entrepreneurs? International Journal of Social Economics. https://doi.org/10.1108/IJSE-04-2022-0277
Jack, W., & Suri, T. (2014). Risk sharing and transactions costs: Evidence from Kenya’s mobile money revolution. American Economic Review, 104(1), 183–223. https://doi.org/10.1257/aer.104.1.183
Makina, D. (2017). Introduction to the financial services in Africa special issue. African Journal of Economic and Management Studies, 8(1), 2–8. https://doi.org/10.1108/ajems-03-2017-149
Mothobi, O., & Kebotsamang, K. (2024). The impact of network coverage on adoption of fintech and financial inclusion in sub-Saharan Africa. Journal of Economic Structures, 13, 2. https://doi.org/10.1186/s40008-023-00326-7
Nnaomah, U. I., Ogundipe, D. O., Aderemi, S., Orieno, O. H., & Olutimehin, D. O. (2024). Digital banking and financial inclusion: A review of practices in the USA and Nigeria. Finance & Accounting Research Journal, 6(3). https://doi.org/10.51594/ farj.v6i3.971
Obuobi, B., Owusu-Manu, D., & Asiedu, R. (2021). Mobile financial services, financial literacy and financial inclusion: Empirical evidence from Ghana. Cogent Economics & Finance, 9(1). https://doi.org/10.1080/23322039.2021.1892926
Ogutu, M., & Were, M. (2018). Mobile financial services and financial inclusion: Evidence from Kenya. African Development Review, 30(4), 450–463. https://doi.org/10.1111/1467-8268.12345
Ozili, P. K. (2018). Impact of digital finance on financial inclusion and stability. Borsa Istanbul Review, 18(4), 329–340. https://doi.org/10.1016/j.bir.2017.12.003
Risman, A., Mulyana, B., Silvatika, B. A., & Sulaeman, A. S. (2021). The effect of digital finance on financial stability. Management Science Letters, 11(3), 803–810. https://doi.org/10.5267/j.msl.2021.3.012
Suri, T., & Jack, W. (2016). The long-run poverty and gender impacts of mobile money. Science, 354(6317), 1288–1292. https://doi.org/10.1126/science.aah5309
Thathsarani, U. S., & Jianguo, W. (2022). Do digital finance and the technology acceptance model strengthen financial inclusion and SME performance? Information, 13(8), 390. https://doi.org/10.3390/info13080390
Tinta, A. A., Al‐Hassan, R. M., & Ouédraogo, I. M. (2022). The micro determinants of financial inclusion and financial resilience in Africa. African Development Review, 34(2), 274–295. https://doi.org/10.1111/1467-8268.12636
Uduji, J. I., & Okolo-Obasi, E. N. (2018). Young rural women’s participation in the e-wallet programme and usage intensity of modern agricultural inputs in Nigeria. Gender, Technology and Development, 22(1), 59–81. https://doi.org/10.1080/09718524. 2018.1445894
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Evans O. N. D. Ocansey, Enoch Kojo Ackom, PhD
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
