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Does mobile money enable women-owned businesses to invest? Firm-level evidence from Sub-Saharan Africa

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  • Asif M. Islam

    (Middle East and North Africa Region Chief Economist Office (MNACE), World Bank Group)

  • Silvia Muzi

    (Development Economics, Enterprise Analysis Unit (DECEA), World Bank Group)

Abstract

This study connects two important findings in Sub-Saharan Africa. First, digital technologies such as mobile money have become widespread and have increased investment by businesses, especially in East Africa. Second, women-owned businesses in the region significantly lag behind their male counterparts in capital investments. Using data for 16 Sub-Saharan African economies, the study finds a positive relationship between mobile money use and investment by women-owned firms; the relationship is statistically insignificant for men-owned firms. This relationship is stronger for women-owned small and medium-sized enterprises. Potential channels are explored. Women-owned firms that use mobile money to transact with suppliers are more likely to invest. Mobile money use is also associated with a greater provision of customer credit and generally greater demand for more credit by women-owned firms. Such patterns are not observed for men-owned firms.

Suggested Citation

  • Asif M. Islam & Silvia Muzi, 2022. "Does mobile money enable women-owned businesses to invest? Firm-level evidence from Sub-Saharan Africa," Small Business Economics, Springer, vol. 59(3), pages 1245-1271, October.
    • Handle: RePEc:kap:sbusec:v:59:y:2022:i:3:d:10.1007_s11187-021-00562-w
    DOI: 10.1007/s11187-021-00562-w
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