Fintech-based Financial Inclusion and Risk-taking of Microfinance Institutions (MFIs): Evidence from Sub-Saharan Africa

Abstract Fintech innovations are rapidly transforming the global financial industry and easing the financial inclusion initiatives of microfinance institutions (MFIs). Such technological transformations are expected to promote stability in the financial system and in turn reduce the risk-taking behavior of its main actors. However, there is limited or no empirical evidence to confirm the impact of fintech-based financial inclusion (FinFI) on the risk-taking behavior of Sub-Saharan African MFIs. Thus, we have developed a new index to measure FinFI and empirically assess its role in reducing the risk-taking attitude of MFIs. The validity of our results was confirmed by using various robustness tests.