Assessing The Role of Emerging Technology Governance Frameworks on Financial Inclusion in Zambia: A Case of Lusaka District

Abstract

During the previous decade, Zambia experienced a rapid growth in digital financial services, which has been driven mainly by technology advancements in the financial technology (FinTech) arena, such as mobile money services, digital banking, and payment services providers. Mobile money penetration significantly grew from about 14% of the adults using the services in 2015 to more than 58% in 2020, with the amount involved in mobile money transactions significantly escalating to ZMW 452 billion in 2023. Despite these emerging trends, the extent of financial inclusion through the more traditional banking institutions is still modest, with no more than 38% to 39% of adults having formal banking accounts. This is an indication that, despite the rapid growth of digital platforms, their role in ensuring sustainable access to finance is still dependent on the governing structures that oversee their operations. The aim of the study was to assess the impact of emerging technology governance frameworks on financial inclusion in Zambia. The specific objectives of the study were to assess the role of Emerging Technology Governance Frameworks on Financial Inclusion in Lusaka District, to evaluate the effectiveness of Emerging Technology Governance Frameworks on Financial Inclusion in Lusaka District, and to identify the channels of Emerging Technology Governance Frameworks on Financial Inclusion in Lusaka District. The researcher adopted a mixed approach and employed qualitative and quantitative research designs. Stratified simple random sampling is suitable for the quantitative phase because the study sample in Lusaka District is heterogeneous, consisting of multiple ranks, financial providers, private and public sectors, and the general public. Stratification ensures that all key subgroups such as bankers, women, SMEs, lending institutions, and the general population are adequately represented in the sample. This enhances the accuracy of estimates and ensures that findings reflect the wider population structure. The research comprised questionnaires and interview schedules. The questionnaires were used because they are the main means of collecting quantitative primary data. The questionnaires enabled quantitative data to be collected in a standardized manner to ensure the data is consistent and coherent for the analysis. From the findings, the study concludes that the analysis from the model summary and the ANOVA table predicted that financial inclusion (F (14,257) = 214.739, p < 0.05) has a significant effect on emerging technology governance in the Lusaka district. The data analysis results showed that the majority of the respondents had a high perception that Lusaka District has regulations governing the use of non-traditional data (telecom usage, utility payments) to assess creditworthiness for underserved customers and that the old generation of customers, including baby boomers and Gen X, are familiar with technology and appreciate the convenience and immediacy of performing banking. However, the majority of the respondents also had low perception that governance is ensuring different mobile money providers promote a shared payment infrastructure within Lusaka District and that the adoption of digital technologies in banking is likely improving accessibility and convenience for customers.