FinTech and CO2 Emission: Evidence from (Top 7) Mobile Money Economies in Africa

Abstract Financial technology has evolved from a mediation role into an established sub-market within the financial ecosystem, gaining a superior advantage over the traditional financial system. Therefore, to ascertain if this advantage extends to protecting our environment, this study estimates the relationship between financial technology and carbon emission from the top seven (7) mobile money economies in sub-Saharan Africa. A balanced panel dataset from 2009 to 2020 is employed and estimated with the FMOLS estimator after checking for cross-sectional dependence, unit-root, stationarity, and cointegration. Results from the estimation suggest a negatively significant relationship between financial technology and carbon emission in these countries. However, domestic credit to the private sector revealed a statistically insignificant relationship with carbon emission for the same period. Further, foreign direct investment reduces carbon emissions. However, gross domestic product and trade openness increases carbon emission in these countries. Therefore, it is recommended that financial technology developers in the sub-region should consider green financial products and services to ensure cleaner production and a better environment.