FinTech in Sub-Saharan Africa: What Has Worked Well, and What Hasn't
The FinTech sector has begun to grow rapidly in sub-Saharan Africa. I document far greater adoption of social media, digital currency, ride sharing, and other FinTech applications in countries with a common law legal heritage compared to those with a civil law system, suggesting that legal origin plays a critical role in setting the stage for growth through entrepreneurship in the developing world. The electrical, telecom, and Internet infrastructure required for FinTech has been built out more extensively in common law countries. Financial inclusion outcomes are also better in emerging markets that have a common law heritage.
I thank participants in the June 2018 African Economic Research Consortium plenary session on “Innovation and Incubation for Africa’s Transformation.” The paper was partly written while I was a visiting professor at Erasmus University Rotterdam. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.