Transforming Financial Services in Sub Saharan Africa: The Interplay of Fintech, Insurtech and Financial Inclusion

Abstract

This paper examines the evolution of Financial Technology (FinTech) and Insurance Technology (InsurTech) within the financial services industry and their role in promoting financial inclusion in Sub-Saharan Africa (SSA).The study focuses on a balanced panel of 22 SSA countries observed over a ten-year period from 2011 to 2021.Financial inclusion is analysed through indicators related to banking efficiency, resource allocation, labour investment, training efficiency, and green credit development. To address potential endogeneity issues inherent in panel data analysis, the Generalized Method of Moments (GMM) estimation technique is employed. The empirical findings reveal that the adoption of FinTech significantly enhances labour investment efficiency within banks across SSA. Results further indicate improved resource allocation and greater training efficiency, suggesting that digital financial innovations support more productive banking operations. The study also finds evidence that FinTech contributes positively to the expansion of green credit, supporting environmentally sustainable financing in the region. In contrast, the rapid growth of digital technologies combined with low levels of digital literacy, particularly among rural populations, limits the effectiveness of InsurTech in reducing insurance service costs. These challenges hinder the full potential of InsurTech to improve insurance accessibility and affordability in SSA. The study concludes that greater investment in financial education and workforce training programs related to InsurTech is essential to ensure smoother adoption, improved insurance penetration, and sustainable financial inclusion across Sub-Saharan Africa.