Breaking Barriers: How Fintech Expands Access to Finance?

Financial technologies (Fintech) have rapidly reshaped access to financial services, particularly in developing countries where traditional banking remains limited. This study investigates fintech’s role in advancing financial inclusion by analyzing panel data from 89 developing economies gathered from Global Findex reports (2011–2021), complemented by International Monetary Fund (IMF), UNU-WIDER, and PRIO datasets. We applied a random-effects regression model and GMM, incorporating fintech adoption alongside macroeconomic and institutional variables such as education, governance quality, and trade openness. Our results show that fintech is the most significant driver of financial inclusion, especially in expanding account ownership, with education and institutional quality further enhancing outcomes. Conversely, we show that population growth and income disparities constrain progress, while government expenditure and GDP growth display mixed effects. We also find that fintech reduces transaction costs and barriers, yet its impact depends on digital literacy, infrastructure, and governance. In conclusion, our findings highlight that fintech represents a transformative but unevenly utilized tool, capable of fostering broader economic participation and reducing inequality when paired with supportive policies and institutional frameworks.