Effect of Financial Technology on Economic Development in Nigeria:

A Time Series Analysis (2006 – 2022)

Abstract

This study is an investigation into the effect of financial technology on economic development in Nigeria. In nations where financial models centered on digital activities are used, agents and creative consumer education are employed to encourage low-income populations to embrace technology with the express goal of advancing both economic development and inclusion. The study used an ex post facto research design, and the World Bank and Central Bank of Nigeria (CBN) provided carefully chosen secondary data. Using data from 2006 to 2022, the models were estimated using the Auto-Regressive Distributive Lag (ARDL) estimation technique and the granger causality test. The study revealed that there is an insignificant negative relationship between volume of mobile banking, internet banking, point of sale terminal transactions, and human development index in Nigeria. On the contrary, value of transactions on automated teller machine was found to have insignificantly and positively associated with human development index in Nigeria. Similarly, the granger causality result revealed that the inducing effects of financial technology were found to have no significant effect on human development index. To this end, this study concludes that financial technology has no significant effect on economic development in Nigeria. Although financial technology has the potential to revolutionize Nigeria's economy, its full effects are still not being felt by many. Strengthening connectivity and infrastructure is necessary to realize this promise. The digital infrastructure is the foundation of financial technology. However, unstable energy and inadequate internet connectivity continue to plague many Nigerian rural and semi-urban communities. The government must give broadband internet, reliable electricity, and mobile network coverage top priority in order to increase access to financial technology services. By extending digital infrastructure to underserved locations, public-private partnerships can assist reach the 38% of Nigerians who do not have access to banking services.