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Macroeconomic effects of Mobile money: evidence from Uganda

Author

Listed:
  • Joseph Mawejje

    (The World Bank)

  • Paul Lakuma

    (Makerere University)

Abstract

This study examined the effects of mobile money—a recent innovation in Uganda’s financial-sector landscape—on aggregate economic activity and other macroeconomic variables. We first estimated the long-run mobile-money demand function using vector error correction (VEC) techniques, distinguishing between balances and transfers/transactions. We then estimated the short-run effects of mobile money on selected macroeconomic variables using structural vector autoregressive (SVAR) methods. The results showed that mobile money had moderate positive effects on monetary aggregates, consumer price index, private-sector credit, and aggregate economic activity. Mobile money balances responded to changes in monetary policy instruments, signaling possible ameliorating effects for the conduct of monetary policy. Finally, the results showed that transactional motives related to mobile money had stronger macroeconomic effects than savings motives.

Suggested Citation

  • Joseph Mawejje & Paul Lakuma, 2019. "Macroeconomic effects of Mobile money: evidence from Uganda," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 5(1), pages 1-20, December.
    • Handle: RePEc:spr:fininn:v:5:y:2019:i:1:d:10.1186_s40854-019-0141-5
    DOI: 10.1186/s40854-019-0141-5
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    Cited by:

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    3. Lorna Katusiime, 2021. "Mobile Money Use: The Impact of Macroeconomic Policy and Regulation," Economies, MDPI, vol. 9(2), pages 1-19, April.
    4. Regean Mugume & Enock W. N. Bulime, 2022. "Post‐COVID‐19 recovery for African economies: Lessons for digital financial inclusion from Kenya and Uganda," African Development Review, African Development Bank, vol. 34(S1), pages 161-176, July.
    5. Apeti, Ablam Estel, 2023. "Household welfare in the digital age: Assessing the effect of mobile money on household consumption volatility in developing countries," World Development, Elsevier, vol. 161(C).
    6. Ochen, Ronald & Bulime, Enock Will Nsubuga, 2023. "Digital Financial Services regulations: Their evolution and impact on financial inclusion in East Africa," KBA Centre for Research on Financial Markets and Policy Working Paper Series 73, Kenya Bankers Association (KBA).
    7. Yinhong Yao & Jianping Li, 2022. "Operational risk assessment of third-party payment platforms: a case study of China," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-20, December.
    8. Aarakit, Sylvia Manjeri & Ntayi, Joseph M. & Wasswa, Francis & Buyinza, Faisal & Adaramola, Muyiwa S. & Ssennono, Vincent F., 2022. "The role of financial inclusion in adoption of solar photovoltaic systems: A case of Uganda," Renewable Energy, Elsevier, vol. 198(C), pages 984-998.
    9. Ablam Estel Apeti & Jean-Louis Combes & Eyah Denise Edoh, 2023. "Entrepreneurship in developing countries: can mobile money play a role?," Working Papers hal-04081304, HAL.
    10. Hway-Boon Ong & Lee-Lee Chong, 2023. "The effect of cashless payments on the internet and mobile banking," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(1), pages 178-188, March.
    11. Ablam Estel Apeti, 2022. "Household welfare in the digital age: Assessing the effect of mobile money on household consumption volatility in developing countries," Post-Print hal-03819779, HAL.

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