Does Mobile Technology Help to Deepen Financial Inclusion? Evidence from South Africa

Olumide Olaoye, Mulatu Zerihun and Mosab I. Tabash

Journal of African Business, 2025, vol. 26, issue 3, 499-513

Abstract: Despite the huge penetration of mobile telephone in South Africa, the country lags its peers (upper middle-income economies) on some financial inclusion metrics such as bank account access and the usage of financial products. Thus, the study investigates the impact of mobile technology on financial inclusion in South Africa over the period 1980–2021, while also looking at the transmission channels. The study adopts a battery of econometric techniques such as the ordinary Least Square (OLS) technique, the fully modified OLS (FMOLS), and the Dynamic OLS (DOLS). The study finds that mobile technology does not help to deepen financial inclusion (when financial inclusion is measured by the number of commercial bank branches per 100, 000 adults). While mobile technology deepens financial inclusion (when measured by volume of credit by the financial sector/GDP). This implies that expanding the digital economy may help to deepen access to credit in South Africa. However, the results also indicate that the effect of mobile technology on financial inclusion may not be direct but through investment in education to improve the citizens’ capability and preparedness to cope with innovative technologies. The research and policy implications are discussed.

Date: 2025
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DOI: 10.1080/15228916.2024.2387391

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