The role of FinTech governance in enhancing financial inclusion and reducing income inequality in MENA countries

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Abstract

This paper examines the effect of financial technology (FinTech) on financial inclusion (FIN) and income inequality; using data from the Global Findex Database (GFD) combined with macroeconomic and institutional indicators. The study employs a quantile regression model on panel data from 11 Middle Eastern and North African (MENA) countries to capture heterogeneous effects of FinTech and FIN across different levels of income inequality. The results show that FinTech adoption significantly reduces income inequality among lower- and middle-income groups, while its effect is insignificant for higher-income groups who already enjoy vast financial access. Moreover, FinTech affects income inequality indirectly by promoting FIN across all dimensions, including account ownership, savings, and borrowing. Additionally, the study reveals a non-linear relationship between financial development and income inequality, depicted as a U-shaped curve. Similarly, education, population growth, and institutional quality alleviate inequality, whereas trade intensity exacerbates it. The results are consistent with recent studies (Demir et al., 2022; Naili et al., 2023), which highlight the role of digital financial innovations in enhancing inclusion and reducing disparities. These findings have significant implications for MENA countries, indicating that acts to reduce income inequality should prioritise promoting FinTech innovation and enhancing FIN.

Keywords: Income Inequality, FinTech, Financial Inclusion, Financial Development, MENA

Authors’ individual contribution: Conceptualization — I.N.K., J.A.M., and E.S.; Methodology — I.N.K., M.I.A., and E.S.; Formal Analysis — M.I.A. and E.S.; Investigation — J.A.M. and E.S.; Data Curation — M.I.A. and M.N.A.A.; Writing — Original Draft — I.N.K., J.A.M., M.I.A., M.N.A.A., and E.S.; Writing — Review & Editing — I.N.K., J.A.M., M.I.A. M.N.A.A., and E.S.; Project Administration — I.N.K.; Funding Acquisition — J.A.M.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: D63, G20, O16, O35

Received: 27.06.2025
Revised: 09.09.2025; 08.01.2026
Accepted: 16.01.2026
Published online: 21.01.2026

How to cite this paper: Khatatbeh, I. N., Mustafa, J. A., Alhusban, M. I., Abu Alfoul, M. N., & Shammout, E. (2026). The role of FinTech governance in enhancing financial inclusion and reducing income inequality in MENA countries. Journal of Governance and Regulation, 15(1), 150–159. https://doi.org/10.22495/jgrv15i1art14