Does mobile money use increase firms’ investment? Evidence from Enterprise Surveys in Kenya, Uganda, and Tanzania

Abstract

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

M‐Pesa and the ‘Market‐Led’ Approach to Financial Inclusion

“…By 2011, the M‐Pesa system in Kenya alone handled more transactions than Western Union did globally (Kendall et al , p. 3). Mobile money now plays an essential role in virtually every sector of the Kenyan economy (Islam et al ). Ninety‐five per cent of small businesses reported that they readily accept mobile money in exchange for goods and service and to pay their workers (Gikenye ).…”

Informal Sector and Mobile Financial Services in Developing Countries: Does Financial Innovation Matter?

“…Suri and Jack (2016) find that access to mobile money lifted 2% of Kenyan households out of extreme poverty. Islam et al (2017) highlight a positive effect of firms' mobile money use on firm investment. This impact is related to reduced transactional costs, increased firms' liquidity, and increased ability to establish credit worthiness by using data generated by mobile financial services use.…”

The Innovation of E-Money via Ssru Smart Purse in Purchasing Products, Food and Beverages of Students at Suan Sunandha Rajabhat University

“…However, achieving the outcomes is heavily dependent on the ability of the firm in question, on the specific sector and country context, and on the enabling environment and policy framework in place. Islam et al (2016) understood that private investment can be an important engine of economic growth in East African countries that are plagued with adverse economic conditions, despite recent growth rate. Against this backdrop, there has been substantial penetration of mobile money, moving beyond simple person-to-person exchanges towards adoption by private firms.…”