The Impact of Fintech on Financial Inclusion in North Africa

Abstract

Our study analyze the influence of Fintech on financial inclusion in nations located in North Africa (Algeria, Tunisia, and Morocco) between 2004 and 2022. Employing the Method of Moments Quantile Regression (MM-QR) framework, we analyze the relationship between Fintech adoption (proxied by ATMs per 100,000 adults) and financial inclusion (represented by branches of commercial banks for every 100,000 adults), incorporating control variables like fixed telephone subscriptions and primary school enrollment. The results of our study indicate a clear and statistically significant positive correlation between Fintech and financial inclusion. The coefficient for Fintech exhibits a decreasing trend across quantiles, in areas where there is little availability to conventional banking services. Additionally, fixed telephone subscriptions display a significant impact on financial inclusion in middle quantiles and remains insignificant for all other quantile. Conversely, primary school enrollment demonstrates a positive and increasing association across all levels of quantiles, highlighting its crucial role in fostering financial literacy and inclusion.