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Lack of access to finance is a major constraint to the growth of small and medium-sized enterprises (SMEs) and entrepreneurship in developing countries. The recent proliferation of mobile phone services, access to the internet and emerging technologies has led to a surge in the use of FinTech in Africa and is transforming the financial sector. This paper aims to examine whether FinTech developments heterogeneously contribute to the growth of digital finance for SMEs and entrepreneurship in 47 African countries from 2013 to 2020.

The paper uses a novel method of moments quantile regression, which deals with heterogeneity and endogeneity in diverse conditions for asymmetric and nonlinear models.

The empirical results reveal that the rise of FinTech companies offering services in Africa heterogeneously increases digital finance for SMEs and entrepreneurship in their different stages of growth. FinTech developments have a strong and positive impact in countries with higher levels of digital finance than those with lower levels. FinTech developments and digital finance positively and significantly influence entrepreneurship in Africa, particularly in the nascent and transitional development stages of entrepreneurship. Institutional quality has a considerable positive moderating effect when used as a control rather than an interaction variable.

The results suggest the need to promote FinTech developments in Africa: to provide a wide range of alternative digital finance schemes to SMEs and to promote entrepreneurship, especially in countries where entrepreneurship is in the nascent and transitional development stages. The results also underscore the need to promote FinTech development through supportive regulations and institutional quality to reduce risks related to FinTech and digital financing schemes.

To the best of the authors’ knowledge, this paper is one of the first attempts to account for the often overlooked heterogeneity effects and show that the influence of FinTech developments is not homogenous across the varying development stages of digital finance and entrepreneurship.

This paper aims to investigate the heterogeneous effects of macroeconomic and financial factors across various distributions of financial deepening in 22 African countries over the past two decades (2000–2019).

The paper uses a recent method of moments quantile regression, which accounts for the often overlooked heterogeneity effects. The analysis focuses on the banking sector, which is predominant in Africa, using a broad range of macroeconomic and financial indicators.

The findings show that gross domestic product per capita positively and significantly impacts financing deepening with an increasing marginal benefit as depth increases. Trade openness positively and substantially affects only high financial deepening. Real interest rate, real exchange rate and inflations negatively and significantly affect financial deepening, especially at higher than lower levels. Financial stability positively and substantially influences financial deepening with an increasing marginal benefit as the depth increases. Bank lending interest rate, bank lending–deposit rate spread, bank concentration and return on equity negatively and substantially impact higher levels of financial deepening than lower levels.

These findings are crucial to policymakers and development partners, as promoting a favourable financial environment and stable macroeconomic policies based on the heterogeneity of financial depths can increase debt financing in Africa.

To the best of the authors’ knowledge, this paper is one of the first attempts to analyse the heterogeneous effects of macroeconomic and financial determinants on varying levels of financial depth in Africa.

This paper investigates the impact of institutional factors on financial deepening and its implications on bank credit in Africa.

The paper employs different panel econometric models to examine the heterogeneity of 50 African countries from 2000 to 2019. The estimators include panel corrected standard errors, system generalized method of moments, quantile and threshold regressions.

The results show that rule of law, regulatory quality, government effectiveness, voice and accountability, control of corruption and political stability significantly influence financial deepening in Africa. However, government effectiveness has a higher effect on middle- and high-income countries, while other indicators have a high impact on low-income countries. All institutional indicators have stronger effects, almost double, at higher financial depth levels than for countries with lower levels. Government effectiveness and regulatory quality impact financial deepening more for countries with strong institutions than weak ones. Thus, the relationship between institutional qualities and credit provided by banks is non-monotonic.

The findings suggest that strengthening appropriate institutional factors based on country heterogeneity may effectively stimulate debt financing in Africa, the primary source of financing for small and medium-sized enterprises and entrepreneurs.

The novelty of this paper is that previous studies did not sufficiently scrutinize the heterogeneity of the structure of African economies – i.e. differences in institution, credit and income levels.

The purpose of this paper is to reexamine the speed and magnitude of exchange rate pass-through (ERPT) to consumer prices in Ghana.

The Johansen Maximum Likelihood approach is employed in the estimation of different models of symmetric and asymmetric ERPT. Specifically asymmetric ERPT models with respect to the direction and size of exchange rate changes are estimated.

Results reveal that even though a depreciation in the nominal effective exchange rate will lead to an increase of consumer prices in the long-run, it is not statistically significant. Evidence also suggests a significant asymmetry with respect to direction and size of exchange rate changes. This indicates that the right ERPT model is an asymmetric model. Specifically ERPT is found to be incomplete but relatively higher in periods of depreciation than in periods of appreciation; that is 53 percent against 3 percent. ERPT is also higher during episodes of large changes (about 51 percent).

It would have been interesting to analyze the impact on consumer prices through changes in import prices. That approach was not adopted due to lack of consistent data on import prices in Ghana.

It is imperative that the monetary authorities critically monitor exchange rate movements in order to be able to take swift policy action so as to counteract any inflationary pressures from the external sector. In particular, much attention should be paid to events and arrangements that could result in large depreciation of the exchange rate.

While previous studies have assumed a symmetric ERPT model for Ghana, this paper is unique in that it investigates the most appropriate model for examining ERPT in Ghana whether symmetric or an asymmetric.

The purpose of this paper is to explore the feasibility of asset-building social welfare in South Africa using the FinScope (2014) consumer survey data set. This is achieved using quantile regression technique to examine how financial inclusion influences asset ownership of individuals at the bottom of the assets distribution.

This paper test the feasibility of asset-building social policy for poor families in South Africa by examining the relationship between financial inclusion and asset ownership using FinScope 2014 consumer survey for South Africa. Financial inclusion is captured by monthly savings and insurance whereas asset ownership is measured by a composite assets index derived using multiple correspondence analyses from indicators of individual asset possession. Quantile regressions are used to examine how financial inclusion influences asset ownership of individuals at the bottom of the assets distribution.

Evidence from mean and quantile regressions showed that the relationship between financial inclusion and asset ownership is positive and statistically significant at 1 per cent level across the entire assets distribution. However, across the distribution, the change in asset ownership varies: higher at the lower tail (10th) quantile, lower at the median (50th) quantile and higher at the upper tail from the 60th quantile. Thus, the poor and low-income families, some of whom may be gaining formal access for the first time, may derive more satisfaction than frequent users such as the working class.

This evidence provides a good case for progressive asset-building social welfare programmes for the poor and low-income families in South Africa. With 11.9 million children currently receiving child support grants, the puzzle is whether income transfer alone can assist these children to break out of poverty. The results should be interpreted as association as the analysis is based on cross-sectional data.

The implications of this study are that social welfare in South Africa needs to extend beyond transfer and invest in capacity development of the poor. Asset-building social policy that combines income transfer and asset building such as child development/saving accounts will help to provide a sustainable pathway out of poverty.

Financial inclusion and asset-building social welfare is a crucial issue as it has the potential to improve welfare of the poor. That is, it acts as a complementary strategy to the income transfer approach to poverty alleviation by enabling the poor to find a sustainable pathway out of poverty by building assets.

Financial inclusion and asset building is a rare area of research particularly in South Africa. This study therefore is timely and its findings will be handy for policy makers in South Africa. Furthermore, the findings will stimulate future research and debates on how financial inclusion and asset-building social welfare can be used to close the gap between the rich and the poor in South Africa.

The purpose of this paper is to discuss the financial sustainability of Tanzanian saving and credit cooperatives (SACCOs).

The data set used in this study comes from SACCOs’ audited financial reports for the year 2011. The performance was estimated using return on asset (ROA) and financial sustainability was estimated using the ratio of total expenses to total revenue. Linear regression was used to investigate the determinants of financial sustainability.

The results show that, about 61 per cent of the sample SACCOs is operationally sustainable and 51 per cent of the total sample is both operationally and financially sustainable. The average sustainability score was 127 per cent. On average, the results for profitability (measured by ROA) is higher than some of the results reported for standard microfinance in the region and globally. In terms of sustainability the result forecasts a promising future for financial cooperative business model as an alternative form of financing the poor.

Only SACCOs with audited financial statements were included in the study, thus the conclusion is limited to SACCOs with similar characteristics. Future work might consider extending the analysis to include SACCOs with non-audited financial statements.

Based on the sample SACCOs can under good management can be used as a sustainable social conduit for financial access and social economic development among the poor in Tanzania.

This study contributes in two ways. First, it contributes towards the scanty empirical literature on the performance of SACCOs in developing countries and in Tanzania in particular. Second, it provides provocative evidence which appears to contradict earlier and more pessimistic accounts and it challenges the ontology about extending member-based microfinance.