Fintech, human development and energy poverty in sub-Saharan Africa

Studies have highlighted the important role of financial technology (fintech) in enhancing socio-economic conditions of nations. However, despite the efforts of governments to improve the latter, the rating of African countries still remains manifestly inadequate. Given that access to electricity is imperative for fintech, and fundamental to improving socioeconomic conditions, we provide novel evidence by investigating the degree to which the prevailing energy poverty in Africa mediates the relationship between the duo. Our baseline results confirm that fintech has a significant positive impact on socioeconomic conditions, proxied by human development, and the impact becomes increasingly significant in the face of constant energy supply. However, when we split our sample based on regions and income classification proposed by the World Bank, our results show that the impact of fintech on human development, in the absence of access to electricity, is notably limited to some African regions. Considering the current state of human development in Africa, our study advocates for more investment in energy infrastructure for the rapid realization of the gains of fintech.