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Does mobile money use increase firms'investment ? evidence from enterprise Surveys in Kenya, Uganda, and Tanzania

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  • Islam,Asif Mohammed
  • Muzi,Silvia
  • Rodriguez Meza,Jorge Luis

Abstract

Private investment can be an important engine of economic growth in East African countries, which, despite recent growth rates, are still plagued with adverse economic conditions. Against this backdrop, there has been substantial penetration of mobile money, moving beyond simple person-to-person exchanges toward adoption by private firms. This study explores whether there is a relationship between firm adoption of mobile money and firm investment. Using firm-level data that are nationally representative of the private sector in three East African countries -- Kenya, Tanzania, and Uganda -- a positive relationship is found between mobile money use and the probability of a firm?s purchase of fixed assets. This relationship is attributed to reduced transaction costs, increased liquidity, and increased credit worthiness associated with the use of mobile phone financial services.

Suggested Citation

  • Islam,Asif Mohammed & Muzi,Silvia & Rodriguez Meza,Jorge Luis, 2016. "Does mobile money use increase firms'investment ? evidence from enterprise Surveys in Kenya, Uganda, and Tanzania," Policy Research Working Paper Series 7890, The World Bank.
  • Handle: RePEc:wbk:wbrwps:7890
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Can mobile money increase investment by businesses?
      by Asif Islam in Let's Talk Development on 2016-12-01 21:45:00

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    1. World Bank Group, 2017. "Tanzania Economic Update, April 2017," World Bank Other Operational Studies 26393, The World Bank.

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    Keywords

    ICT Economics;

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