IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/78006.html
   My bibliography  Save this paper

Mobile banking in Sub-Saharan Africa: setting the way towards financial development

Author

Listed:
  • Rouse, Marybeth
  • Verhoef, y Grietjie

Abstract

The importance of financial development for long-term economic growth has been recognised by policy-makers arounds the world. Fast growing economies with limited formal banking services experience greater financial exclusion. The explosion in mobile phone technology in Africa saw the rapid development of mobile banking. Many countries in Africa have poor retail banking network infrastructure especially in the rural areas. Mobile communication networks introduced innovative products to extend mobile banking into remote rural locations. The development of mobile banking has contributed towards enhanced financial inclusion in Sub-Saharan Africa (SSA). In less than ten years, Kenya has become the leading country in SSA for mobile banking penetration and mobile banking has been instrumental in providing access to financial services to the previously unbanked. This article surveys the state of economic development in Africa as contextualisation of subsequent trends in banking developments in SSA.

Suggested Citation

  • Rouse, Marybeth & Verhoef, y Grietjie, 2017. "Mobile banking in Sub-Saharan Africa: setting the way towards financial development," MPRA Paper 78006, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:78006
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/78006/1/MPRA_paper_78006.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Allen, Franklin & Demirguc-Kunt, Asli & Klapper, Leora & Martinez Peria, Maria Soledad, 2016. "The foundations of financial inclusion: Understanding ownership and use of formal accounts," Journal of Financial Intermediation, Elsevier, vol. 27(C), pages 1-30.
    2. De Gregorio, Jose & Guidotti, Pablo E., 1995. "Financial development and economic growth," World Development, Elsevier, vol. 23(3), pages 433-448, March.
    3. Cho, Yoonyoung & Tien, Bienvenue N., 2014. "Sub-Saharan Africa's recent growth spurt : an analysis of the sources of growth," Policy Research Working Paper Series 6862, The World Bank.
    4. Leora Klapper & Dorothe Singer, 2015. "The Role of Informal Financial Services in Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 24(suppl_1), pages 12-31.
    5. Beck, Thorsten & Cull, Robert, 2013. "Banking in Africa," Policy Research Working Paper Series 6684, The World Bank.
    6. World Bank, 2016. "World Development Indicators 2016," World Bank Publications - Books, The World Bank Group, number 23969, December.
    7. Robert G. King & Ross Levine, 1993. "Finance and Growth: Schumpeter Might Be Right," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 717-737.
    8. Isaac Mbiti & David N. Weil, 2015. "Mobile Banking: The Impact of M-Pesa in Kenya," NBER Chapters, in: African Successes, Volume III: Modernization and Development, pages 247-293, National Bureau of Economic Research, Inc.
    9. Miriam Bruhn & Inessa Love, 2014. "The Real Impact of Improved Access to Finance: Evidence from Mexico," Journal of Finance, American Finance Association, vol. 69(3), pages 1347-1376, June.
    10. Asli Demirgüç-Kunt & Ross Levine, 2008. "Finance, Financial Sector Policies, and Long-Run Growth," World Bank Publications - Books, The World Bank Group, number 28021, December.
    11. Demirguc-Kunt,Asli & Klapper,Leora & Singer,Dorothe & Van Oudheusden,Peter, 2015. "The Global Findex Database 2014 : measuring financial inclusion around the world," Policy Research Working Paper Series 7255, The World Bank.
    12. Levine, Ross, 1998. "The Legal Environment, Banks, and Long-Run Economic Growth," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 30(3), pages 596-613, August.
    13. Richard Duncombe & Richard Boateng, 2009. "Mobile Phones and Financial Services in Developing Countries: a review of concepts, methods, issues, evidence and future research directions," Third World Quarterly, Taylor & Francis Journals, vol. 30(7), pages 1237-1258.
    14. Honohan, Patrick, 2008. "Cross-country variation in household access to financial services," Journal of Banking & Finance, Elsevier, vol. 32(11), pages 2493-2500, November.
    15. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
    16. William Jack & Tavneet Suri, 2011. "Mobile Money: The Economics of M-PESA," NBER Working Papers 16721, National Bureau of Economic Research, Inc.
    17. Mr. Alexander Massara & André Mialou, 2014. "Assessing Countries’ Financial Inclusion Standing - A New Composite Index," IMF Working Papers 2014/036, International Monetary Fund.
    18. Jeffrey James & Mila Versteeg, 2007. "Mobile phones in Africa: how much do we really know?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 84(1), pages 117-126, October.
    19. World Bank, 2014. "Global Financial Development Report 2014 : Financial Inclusion," World Bank Publications - Books, The World Bank Group, number 16238, December.
    20. James, M.J. & Versteeg, M., 2007. "Mobile phones in Africa : How much do we really know?," Other publications TiSEM 71c384dd-b246-4fa0-a046-d, Tilburg University, School of Economics and Management.
    21. Thorsten Beck & Lemma Senbet & Witness Simbanegavi, 2015. "Financial Inclusion and Innovation in Africa: An Overview," Journal of African Economies, Centre for the Study of African Economies, vol. 24(suppl_1), pages 3-11.
    22. Levine, Ross, 2005. "Finance and Growth: Theory and Evidence," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934, Elsevier.
    23. Thorsten Beck, 2015. "Cross-Border Banking and Financial Deepening: The African Experience," Journal of African Economies, Centre for the Study of African Economies, vol. 24(suppl_1), pages 32-45.
    24. Carbó-Valverde, Santiago & Marques-Ibanez, David & Rodríguez-Fernández, Francisco, 2012. "Securitization, risk-transferring and financial instability: The case of Spain," Journal of International Money and Finance, Elsevier, vol. 31(1), pages 80-101.
    25. Thorsten Beck & Asli Demirgüç-Kunt & Ross Levine, 2007. "Finance, inequality and the poor," Journal of Economic Growth, Springer, vol. 12(1), pages 27-49, March.
    26. Swamy, Vighneswara, 2014. "Financial Inclusion, Gender Dimension, and Economic Impact on Poor Households," World Development, Elsevier, vol. 56(C), pages 1-15.
    27. Dholakia, Ruby Roy & Dholakia, Nikhilesh, 2004. "Mobility and markets: emerging outlines of m-commerce," Journal of Business Research, Elsevier, vol. 57(12), pages 1391-1396, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Bank branch density and economic development
      by ? in FRED blog on 2021-11-29 14:00:00

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alfonso Siano & Lukman Raimi & Maria Palazzo & Mirela Clementina Panait, 2020. "Mobile Banking: An Innovative Solution for Increasing Financial Inclusion in Sub-Saharan African Countries: Evidence from Nigeria," Sustainability, MDPI, vol. 12(23), pages 1-24, December.
    2. Melia, Elvis, 2019. "The impact of information and communication technologies on jobs in Africa: a literature review," IDOS Discussion Papers 3/2019, German Institute of Development and Sustainability (IDOS).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ahmad Hassan Ahmad & Christopher Green & Fei Jiang, 2020. "Mobile Money, Financial Inclusion And Development: A Review With Reference To African Experience," Journal of Economic Surveys, Wiley Blackwell, vol. 34(4), pages 753-792, September.
    2. Marybeth-Rouse & Bernardo Batiz-Lazo & Santiago Carbo-Valverde, 2023. "Financial inclusion in South Africa - Influencing factors and public policy," Papers 23001, Working Papers of Business and Economics School. Anahuac University (Mexico)..
    3. Ahamed, M. Mostak & Mallick, Sushanta K., 2019. "Is financial inclusion good for bank stability? International evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 403-427.
    4. Tony Cavoli & Sasidaran Gopalan & Ramkishen S. Rajan, 2020. "Does Financial Inclusion Amplify Output Volatility in Emerging and Developing Economies?," Open Economies Review, Springer, vol. 31(4), pages 901-930, September.
    5. Thereza Balliester Reis, 2022. "Socio‐economic determinants of financial inclusion: An evaluation with a microdata multidimensional index," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(3), pages 587-611, April.
    6. Ghosh, Saibal, 2016. "Does mobile telephony spur growth? Evidence from Indian states," Telecommunications Policy, Elsevier, vol. 40(10), pages 1020-1031.
    7. Franklin Allen & Elena Carletti & Robert Cull & Jun QJ Qian & Lemma Senbet & Patricio Valenzuela, 2021. "Improving Access to Banking: Evidence from Kenya [A matter of experience? Understanding the decline in group lending]," Review of Finance, European Finance Association, vol. 25(2), pages 403-447.
    8. Salman Mahmood & Wen shuhui & Shoaib Aslam & Tanveer Ahmed, 2022. "The Financial Inclusion Development and Its Impacts on Disposable Income," SAGE Open, , vol. 12(2), pages 21582440221, April.
    9. Menyelim M. Chima & Abiola Ayopo Babajide & Alex Adegboye & Segun Kehinde & Oluwatobi Fasheyitan, 2021. "The Relevance of Financial Inclusion on Sustainable Economic Growth in Sub-Saharan African Nations," Sustainability, MDPI, vol. 13(10), pages 1-20, May.
    10. Tyler Girard, 2020. "Bank Accounts for All: How Do State Policies Matter?," Journal of International Development, John Wiley & Sons, Ltd., vol. 32(5), pages 793-818, July.
    11. Marcelin, Isaac & Egbendewe, Aklesso Y.G. & Oloufade, Djoulassi K. & Sun, Wei, 2022. "Financial inclusion, bank ownership, and economy performance: Evidence from developing countries," Finance Research Letters, Elsevier, vol. 46(PA).
    12. Amit Pandey & Ravi Kiran & Rakesh Kumar Sharma, 2022. "Investigating the Impact of Financial Inclusion Drivers, Financial Literacy and Financial Initiatives in Fostering Sustainable Growth in North India," Sustainability, MDPI, vol. 14(17), pages 1-21, September.
    13. Berger, Allen N. & Molyneux, Phil & Wilson, John O.S., 2020. "Banks and the real economy: An assessment of the research," Journal of Corporate Finance, Elsevier, vol. 62(C).
    14. Adolfo Barajas & Ralph Chami & Seyed Reza Yousefi, 2016. "The Finance and Growth Nexus Re-Examined: Do All Countries Benefit Equally?," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 1(5), pages 5-38, June.
    15. António Afonso & M. Carmen Blanco-Arana, 2018. "Financial Development and Economic Growth: A Study for OECD Countries in the Context of Crisis," Working Papers REM 2018/46, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    16. Alberto Bucci & Simone Marsiglio, 2019. "Financial development and economic growth: long‐run equilibrium and transitional dynamics," Scottish Journal of Political Economy, Scottish Economic Society, vol. 66(3), pages 331-359, July.
    17. Jing Zhang, 2020. "A Theoretical Framework of Financial Inclusion on Poverty Alleviation," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 10(5), pages 1-1.
    18. Bofinger, Peter & Geißendörfer, Lisa & Haas, Thomas & Mayer, Fabian, 2021. "Discovering the True Schumpeter - New Insights into the Finance and Growth Nexus," CEPR Discussion Papers 16851, C.E.P.R. Discussion Papers.
    19. Tchouassi, Gérard & Tomo, Christian Parfait, 2022. "Modélisation des effets des réformes institutionnelles sur le développement financier pour la croissance économique en zone CEMAC [Modeling the effects of institutional reforms on financial develop," MPRA Paper 113482, University Library of Munich, Germany, revised 17 Jun 2022.
    20. Sumit Agarwal & Abhiroop Mukherjee & S Lakshmi Naaraayanan, 2019. "Roads and Loans," HKUST IEMS Working Paper Series 2019-61, HKUST Institute for Emerging Market Studies, revised May 2019.

    More about this item

    Keywords

    financial development; financial inclusion; mobile technology; retail banking; Sub-Saharan Africa (SSA);
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:78006. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.