Conference Paper
FinTechs and Financial Literacy: Assessing Their Joint Impact on Financial Inclusion in the MENA Region
No.
ERF32AC_98
Publisher
ERF
Date
May, 2026
Topic
O3. Technological Change, Research and Development, Intellectual Property Rights
G2. Financial Institutions and Services
O1. Economic Development
This study investigates how the interaction between FinTech adoption and financial literacy affects financial inclusion in MENA countries. While existing literature examines these factors separately, no empirical evidence explores their joint impact on financial inclusion, particularly in developing and emerging economies. Also addressing a major gap in the literature where both dimensions are rarely examined together using robust multidimensional measures, it is the first study to employ a financial inclusion index (FII by Sarma, 2008) as the dependent variable and to measure financial literacy using the innovative Financial Knowledge Index (FKI), which provides a composite and multidimensional assessment of financial literacy at the country level. The study employs robust econometric methods using annual data from 2004 to 2022 for 13 MENA countries, allowing for the estimation of both individual and interactive effects of FinTech adoption and financial literacy on financial inclusion. The results reveal that the separate impact of FinTech adoption and financial literacy on financial inclusion is negative; also, the interaction between the two variables exerts a negative and statistically significant effect. These results confirm that a higher level of financial literacy does not obligatorily promote the inclusive capacity of Fintechs. These findings may be due to some structural barriers, informal financial practices, or institutional quality that limit the financially literate people’s capacity to translate digital skills into effective inclusion.