Author(s): Masunda Shylet
Over the past few decades, the global financial sector has undergone significant transition. Developments such as increased use of financial instruments, capital inflows, new regulations, deregulation, and innovations have influenced the financial sector, private investment, and the broader economy. Financial technology (FinTech) has brought major changes to financial services, reshaping economies. While much is known about FinTech's global impact, little research has examined its effect on private investment in developing nations such as Zimbabwe. This study examines how financial technology influences private-sector investment in Zimbabwe. The study is motivated by the introduction of new financial products—such as mobile money, real- time gross settlement systems, remittances, and internet banking—especially during periods of low private investment. The analysis uses Fully Modified Ordinary Least Squares and Canonical Cointegration Regression (CCR) models. Results show that financial technology has a positive and significant long-run impact on private investment in Zimbabwe. The findings also reveal a negative relationship between private investment and exchange rates. The study recommends that authorities, investors, and development agencies leverage digital financial innovation to support sustainable private sector investment. However, growth of the money supply alone is insufficient; sound economic management is also necessary for effective private investment.