IDEAS home Printed from https://ideas.repec.org/a/spr/inrvec/v72y2025i2d10.1007_s12232-025-00490-1.html

The combined role of FinTech innovation and financial literacy in sustainable financial inclusion in Nigeria

Author

Listed:
  • Chinwe Sam-Abugu

    (University of the West of England, Department of Accounting, Finance and Economics, Bristol Business School)

  • Xiaojun Luo

    (University of the West of England, Department of Accounting, Finance and Economics, Bristol Business School)

  • Ben Wong

    (University of the West of England, Department of Accounting, Finance and Economics, Bristol Business School)

Abstract

Financial inclusion remains a critical challenge in Nigeria, particularly in rural areas where access to financial services and financial literacy levels are significantly low. While FinTech innovations have the potential to bridge this gap, existing research has not fully examined the comparative effects of financial technology adoption and financial literacy on financial inclusion. Specifically, prior studies fail to assess how both factors interact and whether financial inclusion is primarily driven by improved access to FinTech services, enhanced financial literacy, or a combination of both. This study investigates the adoption, accessibility, and affordability of FinTech products in Nigeria while assessing individuals’ ability to effectively utilize these technologies. Using survey data from rural populations, our study examines how FinTech innovations influence the uptake of financial services that contribute to wealth circulation and economic growth. We reveal that while FinTech adoption has increased among rural dwellers, financial literacy has a more significant impact on financial inclusion than access to FinTech services. This is largely due to the continued dominance of traditional banks as primary FinTech service providers, whose presence is predominantly concentrated in urban areas. Consequently, rural financial inclusion remains constrained despite the growing availability of digital financial solutions. We address the need for targeted strategies to enhance financial literacy and improve access to FinTech services in rural areas. Policymakers and FinTech companies should prioritise financial education initiatives and develop more inclusive digital financial solutions to accelerate financial inclusion in rural areas.

Suggested Citation

  • Chinwe Sam-Abugu & Xiaojun Luo & Ben Wong, 2025. "The combined role of FinTech innovation and financial literacy in sustainable financial inclusion in Nigeria," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 72(2), pages 1-25, December.
    • Handle: RePEc:spr:inrvec:v:72:y:2025:i:2:d:10.1007_s12232-025-00490-1
    DOI: 10.1007/s12232-025-00490-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12232-025-00490-1
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s12232-025-00490-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Holzmann, Robert, 2010. "Bringing financial literacy and education to low and middle income countries : the need to review, adjust, and extend current wisdom," The Social Policy and Labor Discussion Paper Series 56501, The World Bank.
    2. Ms. Ratna Sahay & Mr. Martin Cihak & Mr. Papa M N'Diaye & Mr. Adolfo Barajas & Ms. Diana B Ayala Pena & Ran Bi & Miss Yuan Gao & Ms. Annette J Kyobe & Lam Nguyen & Christian Saborowski & Katsiaryna Sv, 2015. "Rethinking Financial Deepening: Stability and Growth in Emerging Markets," IMF Staff Discussion Notes 2015/008, International Monetary Fund.
    3. Sant'Anna, Dário A.L.M. & Figueiredo, Paulo N., 2024. "Fintech innovation: Is it beneficial or detrimental to financial inclusion and financial stability? A systematic literature review and research directions," Emerging Markets Review, Elsevier, vol. 60(C).
    4. repec:imf:imfsdn:15/8 is not listed on IDEAS
    5. William Jack & Tavneet Suri, 2014. "Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution," American Economic Review, American Economic Association, vol. 104(1), pages 183-223, January.
    6. Shawn Cole & Thomas Sampson & Bilal Zia, 2011. "Prices or Knowledge? What Drives Demand for Financial Services in Emerging Markets?," Journal of Finance, American Finance Association, vol. 66(6), pages 1933-1967, December.
    7. Declan French & Donal McKillop & Elaine Stewart, 2020. "The effectiveness of smartphone apps in improving financial capability," The European Journal of Finance, Taylor & Francis Journals, vol. 26(4-5), pages 302-318, March.
    8. Elaine Kempson, 2009. "Framework for the Development of Financial Literacy Baseline Surveys: A First International Comparative Analysis," OECD Working Papers on Finance, Insurance and Private Pensions 1, OECD Publishing.
    9. Jing Zhang & Vangelis Souitaris & Pek–hooi Soh & Poh–kam Wong, 2008. "A Contingent Model of Network Utilization in Early Financing of Technology Ventures," Entrepreneurship Theory and Practice, , vol. 32(4), pages 593-613, July.
    10. Ratna Sahay & Martin Cihak & Papa M N'Diaye & Adolfo Barajas & Diana B Ayala Pena & Ran Bi & Yuan Gao & Annette J Kyobe & Lam Nguyen & Christian Saborowski & Katsiaryna Svirydzenka & Seyed Reza Yousef, 2015. "Rethinking Financial Deepening; Stability and Growth in Emerging Markets," IMF Staff Discussion Notes 15/08, International Monetary Fund.
    11. Adele Atkinson & Flore-Anne Messy, 2013. "Promoting Financial Inclusion through Financial Education: OECD/INFE Evidence, Policies and Practice," OECD Working Papers on Finance, Insurance and Private Pensions 34, OECD Publishing.
    12. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Asif Raihan & Syed Masiur Rahman & Mohammad Ridwan & Tapan Sarker, 2025. "FinTech Adoption and Its Influence on Sustainable Mineral Resource Management in the United States," Resources, MDPI, vol. 14(6), pages 1-21, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Singh, Nirvikar, 2018. "Financial Inclusion: Concepts, Issues and Policies for India," Santa Cruz Department of Economics, Working Paper Series qt98p5m37s, Department of Economics, UC Santa Cruz.
    2. Di Giannatale, Sonia & Roa, María José, 2016. "Formal Saving in Developing Economies: Barriers, Interventions, and Effects," IDB Publications (Working Papers) 8107, Inter-American Development Bank.
    3. Gallego-Losada, María-Jesús & Montero-Navarro, Antonio & García-Abajo, Elisa & Gallego-Losada, Rocío, 2023. "Digital financial inclusion. Visualizing the academic literature," Research in International Business and Finance, Elsevier, vol. 64(C).
    4. Grohmann, Antonia & Klühs, Theres & Menkhoff, Lukas, 2018. "Does financial literacy improve financial inclusion? Cross country evidence," World Development, Elsevier, vol. 111(C), pages 84-96.
    5. Ahmad Hassan Ahmad & Christopher Green & Fei Jiang, 2020. "Mobile Money, Financial Inclusion And Development: A Review With Reference To African Experience," Journal of Economic Surveys, Wiley Blackwell, vol. 34(4), pages 753-792, September.
    6. Jason Kasozi & Daniel Makina, 2021. "Analysis of financial literacy and its effects on financial inclusion in Uganda," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 10(3), pages 67-83, July.
    7. Kass-Hanna, Josephine & Lyons, Angela C. & Liu, Fan, 2022. "Building financial resilience through financial and digital literacy in South Asia and Sub-Saharan Africa," Emerging Markets Review, Elsevier, vol. 51(PA).
    8. Pak, Tae‐Young & Chatterjee, Swarn & Choung, Youngjoo, 2026. "Digital financial services use and life satisfaction: Is financial well‐being a mediator?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 50(1), pages 1-16.
    9. Yang, Junhong & Wu, Yu & Huang, Bihong, 2023. "Digital finance and financial literacy: Evidence from Chinese households," Journal of Banking & Finance, Elsevier, vol. 156(C).
    10. Tim Kaiser & Lukas Menkhoff, 2018. "Active Learning Fosters Financial Behavior: Experimental Evidence," Discussion Papers of DIW Berlin 1743, DIW Berlin, German Institute for Economic Research.
    11. Kaiser, Tim & Menkhoff, Lukas, 2018. "Active Learning Improves Financial Education:," Rationality and Competition Discussion Paper Series 131, CRC TRR 190 Rationality and Competition.
    12. Marcelin, Isaac & Sun, Wei, 2025. "Financial inclusion, inequality, and retirement trends among older workers," Global Finance Journal, Elsevier, vol. 66(C).
    13. Cordero, José Manuel & Gil, María & Pedraja Chaparro, Francisco, 2016. "Exploring the effect of financial literacy courses on student achievement: a cross-country approach using PISA 2012 data," MPRA Paper 75474, University Library of Munich, Germany.
    14. Kamer Karakurum-Ozdemir & Melike Kokkizil & Gokce Uysal, 2019. "Financial Literacy in Developing Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(1), pages 325-353, May.
    15. Henryk Bak & Sebastian Maciejewski, 2015. "Asymmetric shocks and international risk sharing in the European Monetary Union and the European Union," Bank i Kredyt, Narodowy Bank Polski, vol. 46(6), pages 523-564.
    16. Liu, Haiyun & Islam, Mollah Aminul & Khan, Muhammad Asif & Hossain, Md Ismail & Pervaiz, Khansa, 2020. "Does financial deepening attract foreign direct investment? Fresh evidence from panel threshold analysis," Research in International Business and Finance, Elsevier, vol. 53(C).
    17. Simone Auer & Emidio Cocozza & Andrea COlabella, 2016. "The financial systems in Russia and Turkey: recent developments and challenges," Questioni di Economia e Finanza (Occasional Papers) 358, Bank of Italy, Economic Research and International Relations Area.
    18. Mansoor Mushtaq & Gulnaz Hameed & Nasir Mahmood & Muhammad Hanif, 2026. "Financial Development, Financial Globalization, and Economic Growth Volatility: A Comparative Analysis for Developing and Developed Economies," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 17(1), pages 1847-1875, February.
    19. Yuan, Shenguo & Wu, Zhouheng & Liu, Lanfeng, 2022. "The effects of financial openness and financial efficiency on Chinese macroeconomic volatilities," The North American Journal of Economics and Finance, Elsevier, vol. 63(C).
    20. Chukwuemeka Chinonso Emenekwe & Robert Ugochukwu Onyeneke & Chinedum Uzoma Nwajiuba & Ifeoma Quinette Anugwa & Obioma Uchenna Emenekwe, 2025. "Determinants of consumption-based and production-based carbon emissions," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(5), pages 10303-10339, May.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:inrvec:v:72:y:2025:i:2:d:10.1007_s12232-025-00490-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.