ABSTRACT

 This study investigated the effect of digital financial services, financial inclusion and economic development in Sub-Saharan Africa (SSA). Economic development was proxied by human capital development index (HDI) while digital financial services was proxied by automated teller machine (ATM) volume transactions, point of sale volume of (POS) transactions, mobile banking service (MBS) volume transactions, number of ATMs available and number of commercial banks. Five SSA countries, namely, Nigeria, Ghana, Uganda, Cabo Verde and Kenya were chosen for the study. The data used for the study spanned from 2009 to 2020. The study was anchored on the Technology Acceptance Theory which is based on the belief that improvement in the economy is enhanced through using particular new technology and information system in business transactions. Panel unit root test carried out using different criteria showed that the data set were largely stationary at levels. Consequently, the fixed effects model was used for the analysis based on the outcome ofthe Hausman test. The results showed that the volume ofATM transactions Panel unit root test carried out using different criteria showed that the data set were largely stationary at levels.. The results showed that the volume of ATM transactions and the number of ATMs had negative effect on HDI, implying that the higher the ATM usage and number of ATM available the lower economic development in SSA. The results ofPOS volume transactions, mobile banking volume transactions and number of commercial banks had increasing effect on economic development in SSA. Of all the independent variables, the volume of ATM transactions, POS transactions, mobile banking transactions and number of commercial banks were the most significant while number ofATM available wasthe only non-significant variable. The negative and significant effect of volume of ATM transactions, this study recommends that banks should ensure that ATMs provide convenience for customers by installing more of them and making them accessible and usable while also considering the rate charged for rendering such services. Consequently, the study concluded that digital financial services is a long road which SSA needs to travel and make the economy significantly successful.