Original Research

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

Jonathan Tembo, Chioma Okoro
Journal of Economic and Financial Sciences | Vol 14, No 1 | a655 | DOI: https://doi.org/10.4102/jef.v14i1.655 | © 2021 Jonathan Tembo, Chioma Okoro | This work is licensed under CC Attribution 4.0
Submitted: 08 February 2021 | Published: 22 June 2021

About the author(s)

Jonathan Tembo, Department of Finance and Investment, College of Business and Economics, University of Johannesburg, Johannesburg, South Africa
Chioma Okoro, Department of Finance and Investment, College of Business and Economics, University of Johannesburg, Johannesburg, South Africa


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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.


Keywords

mobile money; regional financial integration; sub-Saharan Africa; cross-border remittances; migrants

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