How has Mobile Banking Stimulated Financial Development in Africa?

Simplice Asongu

No 12/027, Working Papers of the African Governance and Development Institute. from African Governance and Development Institute.

Abstract: In the first empirical assessment of the incidence of mobile banking on financial intermediary development in Africa, we use two definitions of the financial system: the traditional IFS (2008) and Asongu (2011) measures of financial sector importance. When the conception of a financial system is based only on banks and other financial institution (IFS, 2008), mobile banking has a negative incidence on traditional financial intermediary dynamics of depth, activity and size. However, when a previously missing informal-financial sector component is integrated into the definition (Asongu, 2011), mobile-banking has a positive incidence on informal financial intermediary development. Three major implications result from the findings. (1) There is a growing role of informal finance in developing countries. (2) The incidence of the burgeoning phenomenon of mobile-banking cannot be effectively assessed at a macroeconomic level by traditional financial development indicators. (3) It is a wake-up call for scholarly research on informal financial intermediary development indicators which will oriented monetary policy; since a great chunk of the monetary base(M0) in less developed countries is now captured by mobile-banking.

Keywords: Banking; Mobile Phones; Shadow Economy; Financial Development; Africa (search for similar items in EconPapers)
JEL-codes: E00 G20 L96 O17 O33 (search for similar items in EconPapers)
Pages: 34
Date: 2012-05-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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http://www.afridev.org/RePEc/agd/agd-wpaper/How-ha ... opment-in-Africa.pdf Revised version, 2013 (application/pdf)

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Working Paper: How has mobile banking stimulated financial development in Africa? (2012)
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