Mobile Internet, Collateral, and Banking

Angelo D’Andrea, Patrick Hitayezu, Kangni Kpodar, Nicola Limodio and Andrea Presbitero

No 2024/070, IMF Working Papers from International Monetary Fund

Abstract: Combining administrative data on credit, internet penetration and a land reform in Rwanda, this paper shows that the complementarity between technology and law can overcome financial frictions. Leveraging quasi-experimental variation in 3G availability from lightning strikes and incidental coverage, we show that mobile connectivity steers borrowers from microfinance to commercial banks and improves loan terms. These effects are partly due to the role of 3G internet in facilitating the acquisition of land titles from the reform, used as a collateral for bank loans and mortgages. We quantify that the collateral's availability mediates 35% of the overall effect of mobile internet on credit and 80% for collateralized loans.

Keywords: Banks; Credit; High-speed Internet; Mobile; Technological Change; internet penetration; loan term; collateral's availability; loan characteristic; credit market; Mobile internet; Bank credit; Loans; Commercial banks; Financial inclusion; Africa (search for similar items in EconPapers)
Pages: 69
Date: 2024-03-29
New Economics Papers: this item is included in nep-ban, nep-dev, nep-fdg, nep-ict and nep-pay
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Working Paper: Mobile internet, collateral and banking (2024)
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