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Information communication technology and financial inclusion of innovative entrepreneurs

Nirosha Hewa WELLALAGE (), Ahmed Hunjra, Riadh Manita and Stuart M. Locke

Technological Forecasting and Social Change, 2021, vol. 163, issue C

Abstract: Financial inclusion (FI) provides significant possibilities for poverty alleviation. Information communication technology (ICT) is an essential component of any FI strategy aiming to enable access to a wide range of financial products and services. This study explores entrepreneurs’ assessments of the role of ICT for their FI and its effect in Africa. Using data for 1436 entrepreneurs, from the World Bank Enterprise Survey database and applying an inverse probability of treatment weighting (IPTW) based on propensity scores, the results of our study indicate that ICT increases entrepreneurs’ FI. In particular, we find that the average FI of entrepreneurs using ICT in their business is approximately 12% higher than their counterparts who do not use ICT. Further, separate treatments of email, website, and mobile phone, show that business website ownership has the highest impact on FI, followed by mobile phone and email. The results are robust through a series of robustness checks including the bivariate probit model, propensity score matching model, and alternative proxies for FI. Our findings confirm the significant role technological deepening plays in advancing FI in Africa, and its potential for wider applicability to other developing economies.

Keywords: Financial inclusion; Information communication technologies; Entrepreneurs; Developing countries; Propensity score analysis; Inverse probability of treatment weighting (search for similar items in EconPapers)
JEL-codes: G21 G28 G32 O17 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.techfore.2020.120416

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