The impact of financial technology on financial stability in the MENA zone

Abstract

This article attempts to determine the influence of financial technology (Fintech) on the stability of financial systems in 19 countries of the Middle East and North Africa (MENA) zone; observed over a period of 17 years (2004- 2020). Therefore, our research is based on the panel vector auto regression models (Panel VAR) that are analyzed using the Eviews 12 statistical program. The results show that the fixed effects models are the most significant for estimating the relationship between the fluctuations of financial stability index (FS) and the changes of the explanatory variables selected in our empirical model. At the same time, these results indicate a significant positive relationship between the economic growth (GDPR), the level of financial concentration (BSC) and the volume of banking crises (CPS, LL) on the financial stability index. While, they also confirm the absence of a significant relationship between the dependent variable and financial technology indexes (MPBR, ATM, IU) and the levels of demographic growth (POPG). This may be explained by the fact that the financial systems of the sample countries are mainly traditional and can be attributed to the low level of financial culture of their societies.