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Threshold effect of banking on income inequalities in developing countries: the importance of mobile money

Author

Listed:
  • Boniface Ngah EPO

    (University of Yaoundé II, Cameroon)

  • Jules Médard NANA DJOMO

    (University of Yaoundé II, Cameroon)

  • Mark Wiykiynyuy TANGWA

    (University of Yaoundé II, Cameroon)

  • Éric Dieudonné OBAMA OBAMA

    (University of Yaoundé II, Cameroon)

Abstract

This study investigates the role that of mobile money on the effect of banking on income inequalities on a panel of 105 developing countries over a period from 1990-2019. We use the system GMMs estimator to examine this relationship for income inequality before as well as after taxes and transfers. Results show that increased in banking contributes to the upsurge in income inequalities in developing countries. Likewise, an increase in bank borrowing also contributes to an increase in income inequality in developing countries. These results were robust to spatial analysis for Sub-Saharan Africa and Latin America and the Caribbean. Policy enactment wise, developing countries should ameliorate mobile money services and access points to significantly reduce inequality.

Suggested Citation

  • Boniface Ngah EPO & Jules Médard NANA DJOMO & Mark Wiykiynyuy TANGWA & Éric Dieudonné OBAMA OBAMA, 2023. "Threshold effect of banking on income inequalities in developing countries: the importance of mobile money," Working Papers of the African Governance and Development Institute. 23/073, African Governance and Development Institute..
    • Handle: RePEc:agd:wpaper:23/073
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Mobile banking; developing countries; poverty; inequality;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I20 - Health, Education, and Welfare - - Education - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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