Topics in Middle Eastern and North African Economies

Document Type

Article

Publication Date

9-1-2021

Abstract

This study analyzes the impact of the proliferation of Financial Technology (FinTech) on the achievability of the Sustainable Development Goals (SDGs) with respect to extreme poverty by 2030. The study uses system General Method of Moments (GMM) dynamic panel estimation methodology on annual data for 12 MENA and 45 SSA countries in addition to 70 emerging markets and developing economies from outside the two regions over the period from 2004 until the latest available data in 2018. Three different measures characterize FinTech adoption: the number of mobile cellular subscriptions per 100 people, the number of fixed broadband subscriptions per 100 people, the percentage of people in the population who use the internet. The preliminary results of the study indicate that FinTech measures have a positive statistically significant impact on reducing extreme poverty for the full sample as well as the MENA and the SSA regions. The second part of the study employs a gap analysis against four poverty targets — United Nations’ 0%, World Bank’s 5%, and two intermediaries of 1.5% and 3% to capture all possibilities. The results of the gap analysis suggest that the situation in the MENA region is more promising than the SSA region where improvements in FinTech along will bring extreme poverty below 5% in all MENA countries with the exception of Yemen and Djibouti. For the SSA region, only 4 out of the 45 countries; Gabon, Cabo Verde, Seychelles, and Mauritius are able to close the extreme poverty target of 5%. The paper concludes that poverty alleviation goes beyond digital dividends and identifies human capital accumulation and improvement in governance as the prerequisites for realizing the potential of FinTech and its contribution to the efforts of eradicating extreme poverty within a policy framework to achieve the SDGs in both the MENA and SSA regions.

Journal Title

Topics in Middle Eastern and North African Economies

ISSN

2334-282X

Publisher

Middle East Economic Association and Loyola University Chicago

Volume

23

Issue

2

Comments

Presentation of the articles in the Topics in Middle Eastern and North African Economies was made possible by a limited license granted to Loyola University Chicago and Middle East Economics Association from the authors who have retained all copyrights in the articles.

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

Download

Included in

Economics Commons

Share

COinS