Fintech development and savings, borrowing, and remittances: A comparative study of emerging economies

• Published in: Emerging markets review 2022-06, Vol.51, p.100842, Article 100842
• Main Authors: Lyons, Angela C., Kass-Hanna, Josephine, Fava, Ana
• Format: Article
• Language: English
• Subjects: Digital financial services; Emerging economies; Financial inclusion; Financial security; Fintech; Vulnerable populations
• ISSN: 1566-0141; 1873-6173
• DOI: 10.1016/j.ememar.2021.100842

Fintech is rapidly changing the financial landscape, especially in the post-COVID era. This study uses data from the world's first global ranking of fintech ecosystems, the Global Fintech Index (GFI), to investigate the linkages between fintech development and demand for savings, borrowing, and remittances for 16 of the world's largest emerging economies. Our results find a consistently strong and positive relationship between fintech development and financial inclusion. However, considerable heterogeneities persist across population groups and regions. Evidence also suggests that access may not translate to greater usage of financial services. The findings have important implications for future models of financial inclusion looking to harness the power of fintech. •Fintech plays a key role in fostering financial inclusion in emerging economies.•Fintech development is positively associated with saving, borrowing and remittances.•Improvements in fintech translate to greater access, but not necessarily greater usage.•Heterogeneities exist across populations and regions.•Vulnerable groups face barriers to financial inclusion that fintech cannot address.