Conference Paper
Do Youths Use Fintech or Banks in North Africa? Complementary vs Substitution Effect
No.
ERF32AC_88
Publisher
ERF
Date
May, 2026
Topic
D1. Household Behavior and Family Economics
G2. Financial Institutions and Services
North African youths lack financial inclusion with respect to account holding and the use of financial services. The supply of Fintech services has increased. Do these enhance youth financial inclusion by building on traditional banking services, or do they replace banking services with competing alternatives? We address a representative sample of five North-African countries: Algeria, Egypt, Mauritania, Morocco and Tunisia. Five pooled samples drawn from the Global Findex Database cover over a decade from 2011-2024. Univariate and bivariate probit regressions test three hypotheses related to age gap according to workforce status, and to the nature of relationship (including unidirectional causality) between traditional banking and Fintech services use, with respect to financial inclusion as for youth. Three main results are noteworthy: (i) No Age gap exists as for Fintech services use. (ii) Fintech adoption among youths improves their traditional financial inclusion. (iii) Conversely, the use of traditional banking services among youths influences positively their adoption of Fintech solutions. These results suggest a complementary (with positive and unidirectional causality) relationship between traditional and Fintech services. Collaboration between banks and Fintech companies enhances youth financial inclusion by leveraging the strengths of both sectors. However, it is crucial to address challenges such as regulatory compliance and cybersecurity to ensure the success of these partnerships.