Original title: FinTech and Good Governance as Catalysts for Financial Sustainability in SSA: Unveiling the Asymmetric Impact of Exchange Rate Volatility
Md. Qamruzzaman, Abdulateif A. Almulhim, Abdullah A. Aljughaiman, Rajnish Kler · September 2026
Keeping a country's financial system safe and stable is tough, especially when local money rapidly loses value. Researchers wanted to see how financial technology, meaning digital tools for money, and good governance help protect banking systems across sub-Saharan Africa. They also looked at what happens when exchange rates swing unpredictably. The researchers tracked banking data from twenty-five countries between 2004 and 2022. They measured overall stability by looking at how close banks were to failing. They found that adopting financial technology and maintaining honest, effective governance both strengthen financial sustainability in the short run and the long run. Meanwhile, wild shifts in currency values harm this stability unevenly. When a local currency suddenly drops in value, it quickly damages financial stability. However, over the long run, systems adapt to these shifts, which partly reduces the initial harm. Good leadership and digital tools clearly build stronger financial systems.
You are saving money for emergencies, putting aside a little each month. But if your local currency suddenly drops in value, you cannot buy as much with your savings right away — that feels like a loss. However, over several years, you adjust: you save more, shop differently, and the economy adapts, so the worst of the initial shock fades. In this paper, FinTech and good governance are like a safer savings box and honest neighbors who help protect your money, while exchange rate volatility is like that shock that hurts at first but eventually gets partially absorbed.
For people and businesses in sub-Saharan Africa, stable banks mean safer savings and loans. This research shows that digital finance and good governance directly support financial stability, while volatile exchange rates — especially sharp drops in a currency's value — can destabilize banks in the short run. The findings could help policymakers decide where to invest: in FinTech, in anti-corruption measures, or in exchange rate risk management.
The abstract does not specify the exact measures used for FinTech innovation or governance quality, nor does it name which countries are included beyond '25 SSA countries.' It also does not report specific effect sizes or confidence intervals. The findings rely on panel-level averages, which may hide nation-specific dynamics. Causal interpretation is limited by the methods' reliance on econometric assumptions; the Dumitrescu–Hurlin test indicates predictive causality, not structural causality.
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FinTech and Good Governance as Catalysts for Financial Sustainability in SSA: Unveiling the Asymmetric Impact of Exchange Rate Volatility — Md. Qamruzzaman, Abdulateif A. Almulhim, Abdullah A. Aljughaiman et al. — F1000Research — doi:10.12688/f1000research.181919.2
Abstract licence: CC BY
Explanation generated by Synthesis from the abstract — it is not the original paper.