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Fintech-based Financial Inclusion and Risk-taking of Microfinance Institutions (MFIs): Evidence from Sub-Saharan Africa

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  • Banna, Hasanul
  • Mia, Md Aslam
  • Nourani, Mohammad
  • Yarovaya, Larisa

Abstract

Fintech innovations are rapidly transforming the global financial industry and easing the financial inclusion initiatives of microfinance institutions (MFIs). Such technological transformations are expected to promote stability in the financial system and in turn reduce the risk-taking behavior of its main actors. However, there is limited or no empirical evidence to confirm the impact of fintech-based financial inclusion (FinFI) on the risk-taking behavior of Sub-Saharan African MFIs. Thus, we have developed a new index to measure FinFI and empirically assess its role in reducing the risk-taking attitude of MFIs. The validity of our results was confirmed by using various robustness tests.

Suggested Citation

  • Banna, Hasanul & Mia, Md Aslam & Nourani, Mohammad & Yarovaya, Larisa, 2022. "Fintech-based Financial Inclusion and Risk-taking of Microfinance Institutions (MFIs): Evidence from Sub-Saharan Africa," Finance Research Letters, Elsevier, vol. 45(C).
    • Handle: RePEc:eee:finlet:v:45:y:2022:i:c:s1544612321002300
    DOI: 10.1016/j.frl.2021.102149
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    References listed on IDEAS

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    More about this item

    Keywords

    Financial technology; financial inclusion; fintech-based financial inclusion; risk-taking behavior; microfinance institutions; Sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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