Mobile money development in sub-Saharan Africa: Its macroeconomic effects and role in financing development
Proceedings of the International Scientific and Practical Conference on Digital Economy (ISCDE 2019)
In developing countries, specifically in sub-Saharan Africa, mobile money comes with huge benefits to users by facilitating users to better manage their cash flows, it allows firms and start-ups to invest, foster the creation and expansion of businesses, reduce transaction costs, pool capital (funds) over time for effective allocation as well as it simplifies and speeds up efficient government transfers. These benefits enables mobile money users to realize and accept significant innovation
... ant innovation processes and strategies, especially in the financial sector, which encourages better conduct of monetary policy. This paper analyzes the macroeconomic impact and its role in financial development including how the system can facilitate the funding of development projects. Particularly, we use GDP per capita and domestic credit from financial sector to proxy for economic growth and access to investment resources, respectively, and their link with mobile money services or activities using dataset from GSMA and the World Bank. To ensure that our study is not bias, we included the number of commercial bank branches as a control variable. Our results indicate that there is a significant positive relation between mobile money and all the variables used during the understudied period, thus confirming that mobile money plays significant role in economic development and the accumulation of capital for financing development projects in sub-Saharan Africa. This paper is important to economic literature as it addresses with evidence the impact of mobile money in Sub-Saharan Africa, which is instructive to policy makers to continue implementing strategic and effective policies that encourage mobile money development in the region.