Fintech Development and Corporate Financing Structure Adjustment

Abstract

Fintech has changed the world financial architecture, bringing about some benefits as well as challenges. The capital structure of organizations in recent times has undergone some adjustments due to the introduction of fintech into the financial ecosystem of businesses. This study explored the relationship between fintech development and the corporate financing of listed firms in Nigeria. The study specifically examined the impact of fintech on equities, corporate bonds, and all share indexes of listed firms in Nigeria from 2009 to 2024. Data on fintech proxies (ATM, mobile pay, POS, and web pay) and proxies of corporate financing (equities, corporate bonds, and all share index) were obtained from the Central Bank of Nigeria (CBN) statistical bulletin for 2024. An ex post facto research design was adopted for the study in which secondary data were used, and the ordinary least squares (OLS) estimation technique in a multiple regression model was employed to estimate the relationship among the variables of interest. Findings revealed a significant impact of fintech proxies (POS and mobile pay) on equity and all share indices, while there was no significant impact of fintech on corporate bonds. The conclusion is that, since corporate bonds are sparingly used as a corporate financing structure, the impact of fintech on them may not be feasible at the moment. It was also concluded that fintech reduces transaction costs and promotes efficiency. Yet, there are challenges as well, including cybercrime, resistance to change, poor fintech infrastructure, among others. However, it was recommended that an effective legislative and regulatory framework be established to address cybercrime, along with user education to enhance users' confidence in the new technology.