Mobile money and regional financial integration: Evidence from sub-Saharan Africa

Abstract

Orientation: The article examines the impact of mobile money adoption and regional financial integration in sub-Saharan Africa.

Research purpose: The study sought to uncover the relationship between mobile money adoption and cross-border remittances as a de facto measure of regional integration.

Motivation for the study: The extent to which differences in mobile money penetration rates across sub-Saharan Africa influence cross-border remittances remains a grey area that necessitates empirical investigation.

Research approach, design and method: A quantitative research method was adopted and the study examined aggregated quarterly data obtained from 41 countries making up the four regions of sub-Saharan Africa. The study applied the dynamic ordinary least squares and fully modified ordinary least squares approaches as the estimation techniques.

Main findings: Mobile money adoption has positively impacted cross-border remittances and improved de facto regional financial links in sub-Saharan Africa. The study’s findings also support the view that better governance through control of corruption and political stability removes dependence on remittances.

Practical/managerial implications: There is a need to integrate mobile money and other cross-border remittance platforms to improve access to financial services for migrants and harness their savings into the mainstream economy.

Contributions/value-add: The study adds to the body of knowledge by showing that higher mobile money penetration rates have regional integration benefits.