Exploring the influence of ICT on Financial Inclusion and Mobile Money Services in Sub-Saharan Africa

Abstract: This thesis investigates the influence of two types of Information and Communication Technologies (ICT), internet and mobile phones, on Financial Inclusion (FI) and Mobile Money Mobile Money (MM) adoption in 24 Sub-Saharan African countries in the last decade. A unique feature of this research is the incorporation of an index measuring financial inclusion, developed specifically for this study. It seeks to investigate if ICTs can contribute to advance financial inclusion for the poor, direct or indirect via the channel of mobile money services. Utilizing newly released data on financial inclusion and mobile money usage, this study employs panel regressions with time and country fixed effects and incorporates socioeconomic and demographic control variables. Despite the significant disparities in financial inclusion and mobile money penetration across the studied region, we find that increased internet penetration significantly contributes to the enhancement of financial inclusion and usage of mobile money services. Conversely, mobile phone penetration, socioeconomic and demographic factors, and the quality of governance display negligible effects on financial inclusion and mobile money adoption. These findings shed light on the need for ICT-focused policies and strategies in promoting financial inclusion, thereby addressing poverty and economic inequality issues. The study contributes to the discourse on ICT as a tool for economic empowerment, particularly in regions with historically low access to formal financial systems. The utilization of a custom-developed financial inclusion index enhances the precision and relevancy of the research outcomes.