Impact of Fintech on Economic Growth: A Case Study of Pakistan.

Abstract

This paper investigates the role of financial technology (FinTech) in propelling economic growth in Pakistan from 1995 to 2021. The FinTech industry employs a technology-based business model to provide financial services, including lending, payment, investment, and financing services. The study is motivated by endogenous growth theory, which seeks to explain technology as the most critical driver of economic growth. The study finds that FinTech startups positively correlate with Pakistan’s economic growth. FinTech firms in their first year are found to be disruptive, but they fail to have severe consequences for Pakistan’s economic growth; however, they seem to encourage economic development in their second year significantly. These findings are derived after accounting for other essential growth determinants: Capital Investment and Employment .