Does Mobile Money Use Increase Firms' Investment? : Evidence from Enterprise Surveys in Kenya, Uganda, and Tanzania
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 mob...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/491931479153921241/Does-mobile-money-use-increase-firms-investment-evidence-from-enterprise-Surveys-in-Kenya-Uganda-and-Tanzania http://hdl.handle.net/10986/25692 |
| Summary: | 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. |
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