Responsible FinTech and the Future of Digital Finance: The Moderating Role of Financial Inclusion in the FinTech–Environmental Sustainability Nexus in Africa

This study examines the effect of financial technology (FinTech) on environmental sustainability, emphasising the moderating role of financial inclusion in Africa. While existing studies focus on the relationship between financial inclusion and FinTech, the moderating mechanism through which financial inclusion influences the FinTech–environmental sustainability nexus remains underexplored. To address this gap, the study explores the interrelationships among FinTech, financial inclusion and environmental sustainability across 20 African countries from 2010 to 2025. Anchored in Rogers’ Diffusion of Innovation Theory, the study employs advanced panel econometric techniques, including the Hadri LM test, System Generalised Method of Moments (SGMM), the Dumitrescu–Hurlin panel causality test, the Difference-in-Hansen test, and Wald tests. Institutional quality, economic growth and foreign direct investment are included as control variables. The findings show that financial inclusion significantly moderates the impact of FinTech on environmental sustainability, providing strong empirical and theoretical support for the study’s central proposition. When considered independently, financial inclusion contributes negatively while FinTech contributes positively to environmental sustainability. However, their interaction/moderation yields a complementary effect that strengthens environmental sustainability by reducing carbon emissions. Furthermore, the study establishes a bidirectional causal relationship among FinTech, financial inclusion, and environmental sustainability. The study concludes that the African continent should systematically expand financial inclusion to amplify the environmental benefits of FinTech innovations by leveraging sustainable digital finance.