TY - JOUR

T1 - Does fintech matter for financial inclusion and financial stability in BRICS markets?

AU - Вукович, Дарко

AU - Hassan, Kabir

AU - Kwakye, Bernard

AU - Febtinugraini, Armike

AU - Shakib, Mohammed

PY - 2024/7/1

Y1 - 2024/7/1

N2 - We investigate whether fintech development expedites financial inclusion and affects the stability of the financial sector in BRICS economies. We first seek to identify the linkage between Fintech development and financial inclusion in the BRICS economies. We then explore if Fintech poses any threat to financial stability by studying the impact of Fintech on three main factors of financial stability; Country risk, Liquidity, and Price volatility to see any possible threat to financial stability. We apply the robust Global Vector Autoregressive (GVAR) model with Bayesian framework to analyze a monthly dataset ranging from 2015 to 2022. By applying a positive shock to Fintech over financial inclusion and financial stability, we reveal a positive dynamic relationship between fintech development and financial inclusion, with fintech exhibiting a long-term influence on financial inclusion in some BRICS countries than others. However, we found no significant evidence that fintech presents any threat to financial stability; at least not in the short term. We offer several policy implications and future research directions.

AB - We investigate whether fintech development expedites financial inclusion and affects the stability of the financial sector in BRICS economies. We first seek to identify the linkage between Fintech development and financial inclusion in the BRICS economies. We then explore if Fintech poses any threat to financial stability by studying the impact of Fintech on three main factors of financial stability; Country risk, Liquidity, and Price volatility to see any possible threat to financial stability. We apply the robust Global Vector Autoregressive (GVAR) model with Bayesian framework to analyze a monthly dataset ranging from 2015 to 2022. By applying a positive shock to Fintech over financial inclusion and financial stability, we reveal a positive dynamic relationship between fintech development and financial inclusion, with fintech exhibiting a long-term influence on financial inclusion in some BRICS countries than others. However, we found no significant evidence that fintech presents any threat to financial stability; at least not in the short term. We offer several policy implications and future research directions.

KW - BRICS countries

KW - Financial inclusion

KW - Financial stability

KW - Financial technology

KW - Global VAR

UR - https://www.sciencedirect.com/science/article/pii/S1566014124000591?dgcid=coauthor

UR - https://www.mendeley.com/catalogue/2a1c1c18-78d1-3a91-8710-133db1401860/

U2 - 10.1016/j.ememar.2024.101164

DO - 10.1016/j.ememar.2024.101164

M3 - Article

VL - 61

JO - Emerging Markets Review

JF - Emerging Markets Review

SN - 1566-0141

M1 - 101164

ER -