COVID-19 Financial Stress Hindered Digital Finance Adoption in Africa

The COVID-19 pandemic spurred the growth of financial technology (FinTech) across the globe, including in many African nations. However, the resulting economic hardships significantly hampered the expansion of digital financial inclusion, according to latest research from Carnegie Mellon University and the University of the Witwatersrand.^{1, 4}

Study Findings

Researchers assessed financial data from 31 African countries using the 2021 World Bank’s Findex data, revealing that financial anxieties stemming from the pandemic decreased individuals’ willingness to embrace digital financial services.² This effect wasn’t uniform, varying based on demographic and institutional factors.⁴

Ganesh Mani, Adjunct Instructor at Carnegie Mellon’s Tepper School of Business, emphasized the importance of financial inclusion, stating, “Financial inclusion is a key factor for seven of the United Nations’ 17 sustainable development goals.”⁴ He also highlighted the potential of FinTech to drive economic transformation and create employment opportunities on the African continent.⁴

Key Factors Influencing Digital Financial Inclusion

• Financial Worry: Individuals experiencing financial stress due to the pandemic were less likely to adopt digital financial services, likely due to reduced disposable income and the costs associated with digital transactions (fees, data).^{2, 4}
• Demographics: Young people, those in urban areas, and individuals who regularly transfer money to others were more inclined to utilize digital financial services.⁴
• Country-Level Factors: Lower institutional quality (e.g., banking systems) and higher inflation rates correlated with increased use of digital financial services, potentially as a coping mechanism during economic instability.⁴ Conversely, economic growth did not necessarily translate to broader financial access.⁴

A Complex Landscape

The pandemic created a dual pathway for digital financial inclusion, accelerating adoption for some although simultaneously erecting barriers for others.⁴ Pre-existing financial vulnerabilities in Sub-Saharan Africa, such as concerns about affording essential expenses like medical bills and school fees, were exacerbated by the pandemic.⁴

The Need for Targeted Policies

The study underscores the necessity for targeted policy interventions to bolster financial resilience and inclusion during crises.² Expanding digital finance in Africa requires not only infrastructure investments but also measures to enhance economic security and address the psychological impact of crises, particularly for vulnerable populations.⁴

Chimwemwe Chipeta, Professor of Corporate Finance at the University of the Witwatersrand, noted, “Our findings highlight the complexity of financial behaviors under stress and underscore the need for targeted policy interventions to enhance financial resilience and inclusion during crises.”⁴

Further Information

The study, titled “Do Individual and Country-Level Factors Cushion the Impact of COVID-19 Financial Worry on Digital Financial Inclusion in Africa?” was published in Research in Globalization.²

Sources:

1. Study shows COVID-19 financial stress slowed digital finance adoption in Africa, Phys.org, March 4, 2026.
2. Do individual and country-level factors cushion the impact of COVID-19…, ScienceDirect.
3. Fintech in Africa: The end of the beginning, McKinsey & Company.
4. Study Shows COVID-19 Financial Stress Slowed Digital Finance Adoption in Africa, Carnegie Mellon University, January 15, 2026.