Exploring the Dynamics of Mobile Money in Africa Causal Links and Financial Inclusion Outcome
Main Article Content
Keywords
Mobile Money, Financial Inclusion, Causality, Digital Economy, E-Finance
Abstract
This study investigates the causal relationships between key mobile money indicators and their implications for financial inclusion in Africa. Using macro-level data from the Global Mobile Money Dataset covering the period 2011–2023, we apply the Toda-Yamamoto causality approach to analyse interactions between registered accounts, active accounts, registered agents, and global transactions. Our results reveal a bidirectional causal relationship between registered accounts and global transactions, highlighting a reinforcing cycle that strengthens mobile money adoption. Additionally, registered agents play a crucial role in facilitating transactions, yet no direct causality is found between agent expansion and new account registrations, suggesting that factors such as trust and awareness are critical drivers of adoption. These findings emphasise the need for targeted policy interventions beyond agent network expansion, including financial literacy programs and user engagement initiatives. This study contributes to the growing literature on mobile money by providing empirical evidence on its role in financial inclusion and offering policy-relevant insights. Future research could explore the long-term integration of mobile money with traditional financial systems and its broader economic implications across diverse regulatory environments.
References
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Ahmad, A. H., Green, C., & Jiang, F. (2020). Mobile money, financial inclusion and development: A review with reference to African experience. Journal of economic surveys, 34, 753–792.
Aker, J. C., & Mbiti, I. M. (2010). Mobile phones and economic development in Africa. Journal of economic Perspectives, 24, 207–232.
Allen, F., Carletti, E., Cull, R., Qian, J. ‘., Senbet, L., & Valenzuela, P. (2014). The African financial development and financial inclusion gaps. Journal of African economies, 23, 614–642.
Aron, J. (2018). Mobile money and the economy: A review of the evidence. The World Bank Research Observer, 33, 135–188.
Asongu, S. A., & Le Roux, S. (2023). The role of mobile money innovations in transforming unemployed women to self-employed women in sub-Saharan Africa. Technological Forecasting and Social Change, 191, 122548.
Avom, D., Bangaké, C., & Ndoya, H. (2023). Do financial innovations improve financial inclusion? Evidence from mobile money adoption in Africa. Technological Forecasting and Social Change, 190, 122451.
Balasubramanian, K., Drake, D. F., & Urrea, G. (2023). The impact of poverty on base of the pyramid operations: Evidence from mobile money in Africa. Journal of Operations Management, 69, 616–642.
Bateman, M., Duvendack, M., & Loubere, N. (2019). Is fin-tech the new panacea for poverty alleviation and local development? Contesting Suri and Jack’s M-Pesa findings published in Science. Review of African Political Economy, 46, 480–495.
Batista, C., & Vicente, P. C. (2020). Improving access to savings through mobile money: Experimental evidence from African smallholder farmers. World Development, 129, 104905.
Beck, T., Demirgüç-Kunt, A., & Levine, R. (2007). Finance, inequality and the poor. Journal of economic growth, 12, 27–49.
Comninos, A. C., Esselaar, S., Ndiwalana, A., & Stork, C. S. (2009). Airtime to cash: unlocking the potential of Africa's mobile phones for banking the unbanked. IST-Africa 2009.
David-West, O., Iheanachor, N., & Umukoro, I. O. (2019). Mobile money as a frugal innovation for the bottom of the pyramid–Cases of selected African countries. Africa Journal of Management, 5, 274–302.
Della Peruta, M. (2018). Adoption of mobile money and financial inclusion: a macroeconomic approach through cluster analysis. Economics of Innovation and New Technology, 27, 154–173.
Demirgüç-Kunt, A., & Singer, D. (2017). Financial inclusion and inclusive growth: A review of recent empirical evidence. World bank policy research working paper.
Demirgüç-Kunt, A., Beck, T. H., & Honohan, P. (2008). Finance for all?: Policies and pitfalls in expanding access. World bank.
Demirguc-Kunt, A., Klapper, L., Singer, D., & Ansar, S. (2018). The Global Findex Database 2017: Measuring financial inclusion and the fintech revolution. World Bank Publications.
Dev, S. M. (2006). Financial inclusion: Issues and challenges. Economic and political weekly, 4310–4313.
Diniz, E., Birochi, R., & Pozzebon, M. (2012). Triggers and barriers to financial inclusion: The use of ICT-based branchless banking in an Amazon county. Electronic Commerce Research and Applications, 11, 484–494.
Djahini-Afawoubo, D. M., Couchoro, M. K., & Atchi, F. K. (2023). Does mobile money contribute to reducing multidimensional poverty? Technological Forecasting and Social Change, 187, 122194.
Donovan, K. (2012). Mobile money for financial inclusion. Information and Communications for development, 61, 61–73.
Espinosa-Vega, M. A., Shirono, M. K., Villanova, M. H., Chhabra, M., Das, M. B., & Fan, M. Y. (2020). Measuring financial access: 10 years of the IMF financial access survey. International Monetary Fund.
Gai, K., Qiu, M., & Sun, X. (2018). A survey on FinTech. Journal of Network and Computer Applications, 103, 262–273.
Geng, X., Janssens, W., Kramer, B., & van der List, M. (2018). Health insurance, a friend in need? Impacts of formal insurance and crowding out of informal insurance. World Development, 111, 196–210.
Gosavi, A. (2018). Can mobile money help firms mitigate the problem of access to finance in Eastern sub-Saharan Africa? Journal of African Business, 19, 343–360.
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Islam, A. M., & Muzi, S. (2022). Does mobile money enable women-owned businesses to invest? Firm-level evidence from Sub-Saharan Africa. Small Business Economics, 59, 1245–1271.
Jack, W., & Suri, T. (2011). Mobile money: The economics of M-PESA. Tech. rep., National Bureau of Economic Research.
Jack, W., & Suri, T. (2014). Risk sharing and transactions costs: Evidence from Kenya's mobile money revolution. American Economic Review, 104, 183–223.
Jack, W., Ray, A., & Suri, T. (2013). Transaction networks: Evidence from mobile money in Kenya. American Economic Review, 103, 356–361.
Johnen, C., Parlasca, M., & Mußhoff, O. (2023). Mobile money adoption in Kenya: The role of mobile money agents. Technological Forecasting and Social Change, 191, 122503.
Klapper, L., & Singer, D. (2014). The opportunities of digitizing payments.
Koomson, I., Bukari, C., & Villano, R. A. (2021). Mobile money adoption and response to idiosyncratic shocks: Empirics from five selected countries in sub-Saharan Africa. Technological Forecasting and Social Change, 167, 120728.
Lashitew, A. A., Van Tulder, R., & Liasse, Y. (2019). Mobile phones for financial inclusion: What explains the diffusion of mobile money innovations? Research Policy, 48, 1201–1215.
Lepoutre, J., & Oguntoye, A. (2018, June). The (non-)emergence of mobile money systems in Sub-Saharan Africa: A comparative multilevel perspective of Kenya and Nigeria. Technological Forecasting and Social Change, 131, 262–275. doi:10.1016/j.techfore.2017.11.010
Malinga, R. B., & Maiga, G. (2019, November). A model for mobile money services adoption by traders in Uganda. THE ELECTRONIC JOURNAL OF INFORMATION SYSTEMS IN DEVELOPING COUNTRIES, 86. doi:10.1002/isd2.12117
Masha, I. (2016). Macroeconomic impact of mobile payment services: A survey of research evidence. International Growth Centre/London School of Economics Regional Workshop, Freetown, Sierra Leone.
Mbiti, I., & Weil, D. N. (2015). Mobile banking: The impact of M-Pesa in Kenya. In African successes, Volume III: Modernization and development (pp. 247–293). University of Chicago Press.
Mothobi, O., & Grzybowski, L. (2017). Infrastructure deficiencies and adoption of mobile money in Sub-Saharan Africa. Information Economics and Policy, 40, 71–79.
Munyegera, G. K., & Matsumoto, T. (2016). Mobile money, remittances, and household welfare: Panel evidence from rural Uganda. World Development, 79, 127–137.
N'dri, L. M., & Kakinaka, M. (2020). Financial inclusion, mobile money, and individual welfare: The case of Burkina Faso. Telecommunications Policy, 44, 101926.
Nguyen, N. P., & Mogaji, E. (2022). # BankFromHome: using advertisement campaigns to change banking behaviour during the COVID-19 pandemic in an emerging economy. In Marketing Communications and Brand Development in Emerging Markets Volume II: Insights for a Changing World (pp. 83–108). Springer.
Ozili, P. K. (2021). Financial inclusion: globally important determinants. Financial Internet Quarterly, 17, 1–11.
Prahalad, C. K. (2005). The Fortune at the Bottom of the Pyramid. Financial Times/Prentice Hall.
Rahman, S. A., Taghizadeh, S. K., Ramayah, T., & Alam, M. M. (2017, May). Technology acceptance among micro-entrepreneurs in marginalized social strata: The case of social innovation in Bangladesh. Technological Forecasting and Social Change, 118, 236–245. doi:10.1016/j.techfore.2017.01.027
Rosa, A., Federico, D., Notte, A., & others. (2024). Financial Inclusion Literature Review: Definition, Measurement, and Challenges. The Role of Financial Inclusion for Reaching Sustainable Development Goals, 28–46.
Scharwat, C. P. (2014). Paying taxes through mobile money: Initial insights into P2G and B2G payments. Paying taxes through mobile money: Initial insights into P2G and B2G payments. London: GSMA.
Senyo, P. K., & Osabutey, E. L. (2020). Unearthing antecedents to financial inclusion through FinTech innovations. Technovation, 98, 102155.
Senyo, P. K., & Osabutey, E. L. (2020, December). Unearthing antecedents to financial inclusion through FinTech innovations. Technovation, 98, 102155. doi:10.1016/j.technovation.2020.102155
Suri, T., & Jack, W. (2016). The long-run poverty and gender impacts of mobile money. Science, 354, 1288–1292.
The World Bank. (2018). Financial inclusion on the rise, but gaps remain. Financial inclusion on the rise, but gaps remain.
Toda, H. Y., & Yamamoto, T. (1995). Statistical inference in vector autoregressions with possibly integrated processes. Journal of econometrics, 66, 225–250.
Tyce, M. (2020). Beyond the neoliberal-statist divide on the drivers of innovation: A political settlements reading of Kenya’s M-Pesa success story. World Development, 125, 104621.
Ahmad, A. H., Green, C., & Jiang, F. (2020). Mobile money, financial inclusion and development: A review with reference to African experience. Journal of economic surveys, 34, 753–792.
Aker, J. C., & Mbiti, I. M. (2010). Mobile phones and economic development in Africa. Journal of economic Perspectives, 24, 207–232.
Allen, F., Carletti, E., Cull, R., Qian, J. ‘., Senbet, L., & Valenzuela, P. (2014). The African financial development and financial inclusion gaps. Journal of African economies, 23, 614–642.
Aron, J. (2018). Mobile money and the economy: A review of the evidence. The World Bank Research Observer, 33, 135–188.
Asongu, S. A., & Le Roux, S. (2023). The role of mobile money innovations in transforming unemployed women to self-employed women in sub-Saharan Africa. Technological Forecasting and Social Change, 191, 122548.
Avom, D., Bangaké, C., & Ndoya, H. (2023). Do financial innovations improve financial inclusion? Evidence from mobile money adoption in Africa. Technological Forecasting and Social Change, 190, 122451.
Balasubramanian, K., Drake, D. F., & Urrea, G. (2023). The impact of poverty on base of the pyramid operations: Evidence from mobile money in Africa. Journal of Operations Management, 69, 616–642.
Bateman, M., Duvendack, M., & Loubere, N. (2019). Is fin-tech the new panacea for poverty alleviation and local development? Contesting Suri and Jack’s M-Pesa findings published in Science. Review of African Political Economy, 46, 480–495.
Batista, C., & Vicente, P. C. (2020). Improving access to savings through mobile money: Experimental evidence from African smallholder farmers. World Development, 129, 104905.
Beck, T., Demirgüç-Kunt, A., & Levine, R. (2007). Finance, inequality and the poor. Journal of economic growth, 12, 27–49.
Comninos, A. C., Esselaar, S., Ndiwalana, A., & Stork, C. S. (2009). Airtime to cash: unlocking the potential of Africa's mobile phones for banking the unbanked. IST-Africa 2009.
David-West, O., Iheanachor, N., & Umukoro, I. O. (2019). Mobile money as a frugal innovation for the bottom of the pyramid–Cases of selected African countries. Africa Journal of Management, 5, 274–302.
Della Peruta, M. (2018). Adoption of mobile money and financial inclusion: a macroeconomic approach through cluster analysis. Economics of Innovation and New Technology, 27, 154–173.
Demirgüç-Kunt, A., & Singer, D. (2017). Financial inclusion and inclusive growth: A review of recent empirical evidence. World bank policy research working paper.
Demirgüç-Kunt, A., Beck, T. H., & Honohan, P. (2008). Finance for all?: Policies and pitfalls in expanding access. World bank.
Demirguc-Kunt, A., Klapper, L., Singer, D., & Ansar, S. (2018). The Global Findex Database 2017: Measuring financial inclusion and the fintech revolution. World Bank Publications.
Dev, S. M. (2006). Financial inclusion: Issues and challenges. Economic and political weekly, 4310–4313.
Diniz, E., Birochi, R., & Pozzebon, M. (2012). Triggers and barriers to financial inclusion: The use of ICT-based branchless banking in an Amazon county. Electronic Commerce Research and Applications, 11, 484–494.
Djahini-Afawoubo, D. M., Couchoro, M. K., & Atchi, F. K. (2023). Does mobile money contribute to reducing multidimensional poverty? Technological Forecasting and Social Change, 187, 122194.
Donovan, K. (2012). Mobile money for financial inclusion. Information and Communications for development, 61, 61–73.
Espinosa-Vega, M. A., Shirono, M. K., Villanova, M. H., Chhabra, M., Das, M. B., & Fan, M. Y. (2020). Measuring financial access: 10 years of the IMF financial access survey. International Monetary Fund.
Gai, K., Qiu, M., & Sun, X. (2018). A survey on FinTech. Journal of Network and Computer Applications, 103, 262–273.
Geng, X., Janssens, W., Kramer, B., & van der List, M. (2018). Health insurance, a friend in need? Impacts of formal insurance and crowding out of informal insurance. World Development, 111, 196–210.
Gosavi, A. (2018). Can mobile money help firms mitigate the problem of access to finance in Eastern sub-Saharan Africa? Journal of African Business, 19, 343–360.
Granger, C. W. (1969, August). Investigating Causal Relations by Econometric Models and Cross-spectral Methods. Econometrica, 37, 424. doi:10.2307/1912791
GSMA. (2023). Global Mobile Money Dataset. Global Mobile Money Dataset.
IMF. (2020). Financial access survey. Financial access survey.
Islam, A. M., & Muzi, S. (2022). Does mobile money enable women-owned businesses to invest? Firm-level evidence from Sub-Saharan Africa. Small Business Economics, 59, 1245–1271.
Jack, W., & Suri, T. (2011). Mobile money: The economics of M-PESA. Tech. rep., National Bureau of Economic Research.
Jack, W., & Suri, T. (2014). Risk sharing and transactions costs: Evidence from Kenya's mobile money revolution. American Economic Review, 104, 183–223.
Jack, W., Ray, A., & Suri, T. (2013). Transaction networks: Evidence from mobile money in Kenya. American Economic Review, 103, 356–361.
Johnen, C., Parlasca, M., & Mußhoff, O. (2023). Mobile money adoption in Kenya: The role of mobile money agents. Technological Forecasting and Social Change, 191, 122503.
Klapper, L., & Singer, D. (2014). The opportunities of digitizing payments.
Koomson, I., Bukari, C., & Villano, R. A. (2021). Mobile money adoption and response to idiosyncratic shocks: Empirics from five selected countries in sub-Saharan Africa. Technological Forecasting and Social Change, 167, 120728.
Lashitew, A. A., Van Tulder, R., & Liasse, Y. (2019). Mobile phones for financial inclusion: What explains the diffusion of mobile money innovations? Research Policy, 48, 1201–1215.
Lepoutre, J., & Oguntoye, A. (2018, June). The (non-)emergence of mobile money systems in Sub-Saharan Africa: A comparative multilevel perspective of Kenya and Nigeria. Technological Forecasting and Social Change, 131, 262–275. doi:10.1016/j.techfore.2017.11.010
Malinga, R. B., & Maiga, G. (2019, November). A model for mobile money services adoption by traders in Uganda. THE ELECTRONIC JOURNAL OF INFORMATION SYSTEMS IN DEVELOPING COUNTRIES, 86. doi:10.1002/isd2.12117
Masha, I. (2016). Macroeconomic impact of mobile payment services: A survey of research evidence. International Growth Centre/London School of Economics Regional Workshop, Freetown, Sierra Leone.
Mbiti, I., & Weil, D. N. (2015). Mobile banking: The impact of M-Pesa in Kenya. In African successes, Volume III: Modernization and development (pp. 247–293). University of Chicago Press.
Mothobi, O., & Grzybowski, L. (2017). Infrastructure deficiencies and adoption of mobile money in Sub-Saharan Africa. Information Economics and Policy, 40, 71–79.
Munyegera, G. K., & Matsumoto, T. (2016). Mobile money, remittances, and household welfare: Panel evidence from rural Uganda. World Development, 79, 127–137.
N'dri, L. M., & Kakinaka, M. (2020). Financial inclusion, mobile money, and individual welfare: The case of Burkina Faso. Telecommunications Policy, 44, 101926.
Nguyen, N. P., & Mogaji, E. (2022). # BankFromHome: using advertisement campaigns to change banking behaviour during the COVID-19 pandemic in an emerging economy. In Marketing Communications and Brand Development in Emerging Markets Volume II: Insights for a Changing World (pp. 83–108). Springer.
Ozili, P. K. (2021). Financial inclusion: globally important determinants. Financial Internet Quarterly, 17, 1–11.
Prahalad, C. K. (2005). The Fortune at the Bottom of the Pyramid. Financial Times/Prentice Hall.
Rahman, S. A., Taghizadeh, S. K., Ramayah, T., & Alam, M. M. (2017, May). Technology acceptance among micro-entrepreneurs in marginalized social strata: The case of social innovation in Bangladesh. Technological Forecasting and Social Change, 118, 236–245. doi:10.1016/j.techfore.2017.01.027
Rosa, A., Federico, D., Notte, A., & others. (2024). Financial Inclusion Literature Review: Definition, Measurement, and Challenges. The Role of Financial Inclusion for Reaching Sustainable Development Goals, 28–46.
Scharwat, C. P. (2014). Paying taxes through mobile money: Initial insights into P2G and B2G payments. Paying taxes through mobile money: Initial insights into P2G and B2G payments. London: GSMA.
Senyo, P. K., & Osabutey, E. L. (2020). Unearthing antecedents to financial inclusion through FinTech innovations. Technovation, 98, 102155.
Senyo, P. K., & Osabutey, E. L. (2020, December). Unearthing antecedents to financial inclusion through FinTech innovations. Technovation, 98, 102155. doi:10.1016/j.technovation.2020.102155
Suri, T., & Jack, W. (2016). The long-run poverty and gender impacts of mobile money. Science, 354, 1288–1292.
The World Bank. (2018). Financial inclusion on the rise, but gaps remain. Financial inclusion on the rise, but gaps remain.
Toda, H. Y., & Yamamoto, T. (1995). Statistical inference in vector autoregressions with possibly integrated processes. Journal of econometrics, 66, 225–250.
Tyce, M. (2020). Beyond the neoliberal-statist divide on the drivers of innovation: A political settlements reading of Kenya’s M-Pesa success story. World Development, 125, 104621.
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Published
2025-04-14
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How to Cite
Lajfari, K., & Soumbara, S. (2025). Exploring the Dynamics of Mobile Money in Africa: Causal Links and Financial Inclusion Outcome. Journal of Telecommunications and the Digital Economy, 13(1), 81-97. https://doi.org/10.18080/jtde.v13n1.1062
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Special Issue: Driving the Digital Economy
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How to Cite
Lajfari, K., & Soumbara, S. (2025). Exploring the Dynamics of Mobile Money in Africa: Causal Links and Financial Inclusion Outcome. Journal of Telecommunications and the Digital Economy, 13(1), 81-97. https://doi.org/10.18080/jtde.v13n1.1062
