Essays in mobile money and mobile banking in developing countries

Abstract

This thesis synthesizes research from three distinct but interconnected studies exploring the dynamics of mobile financial services (mobile money and mobile banking) in developing economies, focusing on their adoption, usage, and impact on household consumption. The first chapter of this thesis introduces the research, providing background and context to the readers in relation to mobile money and mobile banking in developing countries. The second chapter of this thesis study delves into the determinants of mobile money adoption and usage across seven developing countries - Bangladesh, India, Kenya, Nigeria, Pakistan, Tanzania, and Uganda. It identifies key socio-economic and demographic factors influencing mobile money services' uptake. Specifically, the second chapter of this thesis analysed data from the Financial Inclusion Insights by Kantar to examine the determinants of mobile money adoption and usage in seven developing countries - Bangladesh, India, Kenya, Nigeria, Pakistan, Tanzania, and Uganda. Using a logistic linear mixed model, findings show that socio-economic and demographic variables such as the respondents' location, age, gender, educational attainment, phone ownership, job type, marital status, participation in microfinancing activities, receiving remittances, location from banks, being below the poverty cut-off, being literate and financially literate are significant determinants to both usage and adoption of mobile money services. Keywords: Financial inclusion, mobile money services, developing economies.

The third chapter narrows down to the Indian context, from the demand side, examining the determinants behind mobile banking adoption and transaction activities within the country's banks from 2013 to 2019. This chapter employed a Heckman Selection model to account for self-selection bias due to unobserved factors influencing mobile banking engagement. This research contributes to the literature by using mobile banking transactions' volume and value to represent mobile banking use and adoption. The Heckman Selection model was employed in this research to account for potential sample selection bias, which may arise if data availability is systematically correlated with the unobserved variables. This is crucial when not all banks may be equally likely to offer mobile banking services, and thus, the sample may not be representative of the population without correction.The factors that predict the adoption of mobile banking are bank size, return on assets, number of states with branches, bank type (private banks), and bank age. Results suggest that larger, older banks, those with a larger number of branches, and those with greater geographical reach have more likelihood of adopting mobile banking than their counterparts.

The fourth chapter aims to make an impact evaluation on the use of mobile money and shifts focus to Tanzania, employing both Difference-in-Differences and Triple Difference-in-Differences methodologies to assess mobile money's differentiated effects on household consumption, underscored by gender and location as moderating factors. Collectively, these studies illuminate the nuanced landscape of mobile financial services in developing economies, emphasizing the critical role of various determinants in adoption and usage patterns and the significant yet varied impact on economic well-being and financial resilience across demographic segments. This dissertation contributes to the broader discourse on financial inclusion, offering insights into policy interventions tailored to enhance mobile money and mobile banking's positive outcomes. Findings indicate the need for policy interventions to address gender-specific barriers to mobile money usage. This study contributes to understanding how mobile money services can enhance economic well-being and financial resilience in diverse household settings in Tanzania.