FinTech and CO₂ emission: evidence from (top 7) mobile money economies in Africa

Abstract

Purpose

The impact of FinTech in sub-Saharan Africa has primarily been limited to financial inclusion. Contrarily, this study aims to deviate from this norm to estimate how FinTech affects carbon emissions in the subregion. This provides policy recommendations for FinTech regulators, service providers and practitioners to consider optimal products and services that reduce carbon emissions.

Design/methodology/approach

A balanced panel data set from 2009 to 2020 is used and estimated with the fully modified ordinary least squares estimator after checking for cross-sectional dependence, unit root, stationarity and cointegration.

Findings

Results from the estimation suggest a negatively significant relationship between financial technology and carbon emissions in these countries. However, domestic credit to the private sector revealed a statistically insignificant relationship with carbon emissions for the same period. Further, foreign direct investment reduces carbon emissions but gross domestic product and trade openness increase carbon emissions in these countries.

Originality/value

The impact of FinTech in sub-Saharan Africa has primarily been limited to financial inclusion. Contrarily, this study deviates from this norm and estimates how FinTech affects carbon emissions in the subregion.

Citation

Coffie, C.P.K., Yeboah, F.K., Emuron, A.S.O. and Ahiabenu, K. (2025), "FinTech and CO₂ emission: evidence from (top 7) mobile money economies in Africa", Journal of Financial Regulation and Compliance, Vol. 33 No. 1, pp. 87-108. https://doi.org/10.1108/JFRC-05-2024-0089