Mobile money adoption and entrepreneurs’ access to trade credit in the informal sector

Godsway Korku Tetteh (), Micheline Goedhuys, Maty Konte () and Pierre Mohnen
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Godsway Korku Tetteh: UNU-MERIT, Maastricht University
Maty Konte: UNU-MERIT, Maastricht University, and Barnard College, Columbia University

No 2021-043, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: Despite the contribution of previous studies to unravel the implications of mobile money in the developing world, the effect of this innovation on an important source of external finance, trade credit, has not been properly accounted for particularly in the informal sector. Using the 2016 FinAccess Household Survey, we investigate the relationship between mobile money adoption and the probability to receive goods and services on credit from suppliers based on a sample of entrepreneurs who operate informal businesses. We further explore the effect of mobile money adoption on the likelihood to offer goods and services on credit to customers. Our estimations suggest that entrepreneurs with mobile money are more likely to receive goods and sesrvices on credit from suppliers. We also find a positive and significant relationship between mobile money adoption and the likelihood to offer goods and services on credit to customers. The evidence supports the promotion of mobile money adoption among entrepreneurs in the informal sector to facilitate access to credit.

Keywords: Entrepreneurship; Financial Innovation; Mobile Money; Trade Credit (search for similar items in EconPapers)
JEL-codes: D14 G21 L26 O16 O33 (search for similar items in EconPapers)
Date: 2021-11-17
New Economics Papers: this item is included in nep-dev, nep-ent, nep-fdg, nep-his, nep-ino, nep-iue, nep-mfd, nep-mon, nep-pay and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2021043

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