The effect of digital financial services on African economies: The case of Kenya

Over the years, with the global economy evolution, digital finance has emerged as a key actor and impacted the financial system. In many African nations, we can observe that most of the population are excluded from conventional banking structure due to several factors forcing them to be ineligible to this system. Moreover, we can observe that the majority of the transactions in some nations are done in cash due to many constraints such as socio-cultural factors, structural and infrastructural, or economic. The characteristics of digital financial service has created a major awareness among populations about the perception of digital financial system and how managing their finance, due in large part to its inclusivity, its speed of operation, secure system, and efficient framework that support the development for social and economic growth. We can highlight the case in Kenya for instance, our primary focusing which is leading in this sector and where 70 % of the population use these services (Ann Njoki Kingiri and Xiaolan Fu 2019). Through our analysis, over several periods from previous literature review and data collected through online research from 2017 to 2023 we found that digital financial services have an impact on financial inclusion and economic growth. This research paper entitled the effect of digital financial service on African economies: The case of Kenya seeks to understand firstly what are the effects of digital financial service on economic indicators such as GDP across different geographical areas in Africa and secondly to understand the contribution among the underserved populations in rural and urban areas. The research is designed to give a thorough picture of the impact of digital financial services even if challenges remain due to factors such as income, age, gender and levels of infrastructure. Keywords: Economic development, Digital finance, African economies