Analysis of Mobile Money Innovations and Energy Poverty in Africa

Mobile money is a novel system for providing seamless financial services in developing countries. The use of this technology has allowed poor households to make payments, receive money, and get credits via mobile phone algorithms, and it has gained popularity among nations in Africa. This technology has leapfrogged the traditional services of formal financial institutions. Many studies have been conducted on energy poverty alleviation in Africa, but little is known empirically about whether mobile money can serve as a policy instrument for energy poverty alleviation in developing economies. Furthermore, the role of mobile money in energy justice has not been explored. The objective of this paper is to fill this gap by examining the effect of mobile money innovations on energy poverty. Applying the system generalized method of moments and panel quantile regression via moments on the dataset of 36 countries in Africa between 2012 and 2021, this study shows that mobile money innovations reduce energy poverty in Africa. Further analysis reveals that the effect is heterogeneous across the sample used in the study. Our findings also reveal that mobile money innovations reduce the disparities in accessing electricity between urban and rural households. Overall, this study suggests that mobile money is a veritable tool that can be used for energy poverty alleviation in developing countries.