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The Role of Betting on Digital Credit Repayment, Coping Mechanisms and Welfare Outcomes: Evidence from Kenya

Author

Listed:
  • Richard Chamboko

    (International Finance Corporation, World Bank Group, Washington, DC 20433, USA
    Institute for Intelligent Systems, University of Johannesburg, Johannesburg 2092, South Africa)

  • Sevias Guvuriro

    (Department of Economics and Finance, University of the Free State, Bloemfontein 9301, South Africa)

Abstract

Digital financial services and more importantly, mobile money, have become an important financial innovation to advance financial inclusion in developing and emerging economies. While digital financial services have improved the lives of many Kenyans, to the growing betting segment of the Kenyan population, these innovations have also brought great convenience to betting. The innovations have allowed easy access to digital credit which can be used for betting. Despite betting or gambling being a widely studied area, particularly in developed countries, little is known about its interaction with financial innovations such as digital financial services in developing and emerging economies. Using data from a 2017 digital credit survey in Kenya, this study investigates if bettors are more likely than non-bettors to be financially distressed or engage in welfare-undermining coping strategies and potentially experience inferior welfare outcomes. The study uses a representative sample of 1040 digital borrowers, of which 304 were digital bettors. Using multivariate logistic regressions, the study found that, after controlling for socio-economic and demographic factors, bettors are significantly more likely than non-bettors to be financially distressed, engage in welfare undermining coping strategies, and have inferior welfare outcomes.

Suggested Citation

  • Richard Chamboko & Sevias Guvuriro, 2021. "The Role of Betting on Digital Credit Repayment, Coping Mechanisms and Welfare Outcomes: Evidence from Kenya," IJFS, MDPI, vol. 9(1), pages 1-12, February.
    • Handle: RePEc:gam:jijfss:v:9:y:2021:i:1:p:10-:d:490905
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    References listed on IDEAS

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    1. Munyegera, Ggombe Kasim & Matsumoto, Tomoya, 2016. "Mobile Money, Remittances, and Household Welfare: Panel Evidence from Rural Uganda," World Development, Elsevier, vol. 79(C), pages 127-137.
    2. Richard Chamboko & Alessandro Re & Sevias Guvuriro, 2017. "Mapping patterns of multiple deprivation in Namibia," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 44(12), pages 2486-2499, December.
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    Cited by:

    1. Burlando, Alfredo & Kuhn, Michael A. & Prina, Silvia, 2025. "Too fast, too furious? Digital credit delivery speed and repayment rates," Journal of Development Economics, Elsevier, vol. 174(C).
    2. Nan, Wenxiu (Vince) & Li, Tao, 2024. "To gamble or not to gamble? The effect of mobile money on gambling in Kenya," Economics Letters, Elsevier, vol. 234(C).
    3. Swati M. Dhawan & Kim Wilson & Hans-Martin Zademach, 2022. "Formal Micro-Credit for Refugees: New Evidence and Thoughts on an Elusive Path to Self-Reliance," Sustainability, MDPI, vol. 14(17), pages 1-21, August.
    4. Vaishali Kamboj & Dipasha Sharma, 2025. "Mapping the landscape of digital financial inclusion and proposing integrative framework: trends, influential works, and future directions," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-19, December.

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