Financial Technology and Poverty Alleviation in Nigeria: An Empirical Investigation

Despite the rapid expansion of financial technology (FinTech) in Nigeria, particularly through digital payments, mobile and internet-based financial services, and other innovative financial platforms, poverty remains a persistent socioeconomic challenge. This raises an important question: to what extent has the growing penetration of FinTech actually translated into improved economic well-being and poverty alleviation in Nigeria? While FinTech is widely expected to promote financial inclusion, reduce transaction costs, and improve access to financial services, its capacity to deliver meaningful poverty-reduction outcomes in the Nigerian context remains an empirical concern. Against this background, this study examined the effects of Financial Technology on Poverty Alleviation in Nigeria, from 2010 to 2024 covering the period FinTech service was revolutionized and data was available. The data utilized was monthly data from 2010 to 2024. The objectives of the study are; to ascertain the level of access to FinTech in Nigeria and how this has affected poverty level; and analyze the relationship between transactions made through innovative FinTech services (blockchain technology) and poverty alleviation in Nigeria.  And to examine the effect of POS services on poverty rate in Nigeria. These variables constitute the independent variables while poverty rate is the dependent variable. The methodology used ex-post-facto research method in compiling the data for this study; and the statistical tool applied was simultaneous equation model, Co-integration Test, and Granger Causality Test. The results identified that, Point-of-sale (POS) payments have significant effect on poverty rate in Nigeria; Lending services provided via mobile and internet payment channels have no significant effect on level of poverty in Nigeria; There is significant relationship between the availability of FinTech services and the poverty level in Nigeria; Transactions made through innovative FinTech services have statistically significant effect on the level of poverty in Nigeria; and Per capita income, POS transactions, financial openness and bank density increased financial technology penetration in Nigeria. 

The study recommended that the government should give priority to expanding financial inclusion services by promoting greater financial openness and improving access to funding for local manufacturers. It also emphasized the need to accelerate the digital transformation of small and medium-sized enterprises (SMEs), particularly those operating in Nigeria’s real sector, as a means of improving their productivity, business performance, and contribution to economic growth.

Keywords: Financial Technology, Poverty Alleviation, Point-of-Sale Payment System, Financial Openness, Innovative Fintech Services, simultaneous equation model.