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Information Technology for Development

Author ORCID Identifier

Pratim Milton Datta: https://orcid.org/0000-0001-7371-4627

Joseph Nwankpa: https://orcid.org/0000-0001-5711-8411

Thomas Acton: https://orcid.org/0000-0002-3705-9634

Abstract

What has led to the rapid rise of Fintech in developing countries? In developing countries EMDEs, (Emerging Markets and Developing Economies), hereafter), does Fintech signal the emergence of proto institutions that leapfrog pronounced existing financial infrastructure gaps? This empirical study, based on 392 global EMDE participants, suggests that perceived capital market failures in EMDEs create an institutional vacuum that requires filling in by proto-institutional structures. Consequently, Fintech provides a much-needed intermediation hedge against an “institutionalized market for lemons” by combining Fintech technological capabilities along with a platform trust transference, incorporating value-added incentives and efficiencies otherwise absent within the extant EMDE physical financial infrastructure ecology.

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