Financial Innovation And Sustainable Development In Africa

Abstract

This research investigates how financial innovation impacts sustainable development in nine African countries between 2006 and 2020. The study used data from the World Bank Development Indicators and applied the GMM panel estimator to assess the relationship between financial innovation and sustainable development. The findings reveal that financial innovation can have both positive and negative effects on sustainable development, depending on the measures used to gauge financial development. When financial sector innovation is used as a measure, the study found a negative impact on sustainable development. However, when measuring innovation in the banking industry and capital market, the results show a positive effect on sustainable development. Therefore, the study recommends the implementation of policies that promote efficiency in the banking industry, the capital market, and financial innovation to ensure the effective operation of Africa's financial system. This paper contributes to the discussion of SDGs in Africa and further confirm the financial intermediation theory in Africa markets