Does FinTech Reduce Gender Asymmetry in Access to Finance in Sub-Saharan Africa? Examining the Role of Digital Inclusion

Abstract

The study examined whether FinTech reduces gender gap in access to finance in sub-Saharan Africa. The study adopts a battery of econometric techniques in analysing the relationship between the two variables. Specifically, the study adopts the ordinary least square (OLS), the two-step system generalized method of moments (GMM) to address the issues of endogeneity and simultaneity feedback and Driscoll and Kraay's consistent covariance matrix estimator to control for every form of cross sectional and temporal dependence in panel data. The study finds that FinTech increases gender asymmetry in access to finance in sub-Saharan Africa. However, the study also reveals that reducing the gender gap in digital inclusion can help to reduce the gender gap in access to finance in sub-Saharan Africa. The results also indicate that government quality and education are important determinants of gender access to financial inclusion in sub-Saharan Africa. One main economic implication of our findings is that the deployment of FinTech alone will not reduce the gender gap in access to finance in sub-Saharan Africa, rather in addition to FinTech, the gender gap in digital inclusion must be adequately addressed. The research and policy implications are discussed.