Does Mobile Money Adoption Increase Informal Business Performance in Zambia?

Roukiya Hassan ()
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Roukiya Hassan: The University of Douala

Journal of the Knowledge Economy, 2024, vol. 15, issue 1, No 62, 1556-1570

Abstract: Abstract Innovation in digital technology has changed the way firms make business. The objective of this paper is to analyse the effect of mobile money adoption on the performance of informal businesses in Zambia. The data are from the 2019 Zambia Informal Sector Business Survey of the World Bank Group with a sample of 914 firms. An instrumental variable bivariate probit model was used to analyse the data. We find that mobile money use helps significantly improve informal business performance. The finding is robust for different purposes of mobile money use. These results can be attributed to the lower transaction costs and the improved liquidity related to the use of mobile money financial services. An important policy implication is that the use of digital technologies such as mobile money could be a key element for improving informal business performance.

Keywords: Mobile money; Informal business; Instrumental variable probit; Zambia; D22; G2; L25; O17 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s13132-023-01205-z

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