Mobile Money Adoption in East Africa: A cross-country study of best- and least-performing countries

Abstract: Mobile money is a digital financial innovation enabling electronic payments and transfers through mobile phones. It has proven to be a convenient, safe and cheap way for money exchange in developing countries where access to traditional banking services is limited. This thesis aims to explore why Small and Medium Enterprises in Zambia do not adopt mobile money in an otherwise well-developed region of mobile money diffusion. A two-folded approach combining an econometric analysis of cross-country firm level determinants of mobile money adoption and a qualitative assessment of the mobile money market in Zambia investigates the underlying causes of non-adoption in Zambia compared to other countries in East Africa. Earlier research indicates that supplier linkages through trade credit provide demand for mobile money adoption. The results of this thesis support this claim. The thesis also shows that mobile money adoption requires continuous quality-updates of the services offered and extensive marketing towards the target groups. To improve diffusion, mobile money providers can partner with suppliers to generate a trickle-down effect along the business value chains.