Connecting the poor: the internet, mobile phones and financial inclusion in Africa
| Pages | 568-581 |
| DOI | https://doi.org/10.1108/DPRG-04-2018-0018 |
| Published date | 10 September 2018 |
| Date | 10 September 2018 |
| Author | Olaniyi Evans |
| Subject Matter | Information & knowledge management,Information management & governance,Information policy |
Connecting the poor: the internet, mobile
phones and financial inclusion in Africa
Olaniyi Evans
Abstract
Purpose –The increased adoption of internet-enabled phones in Africa has causedmuch speculation
and optimism concerningits effects on financial inclusion. Policymakers,the media and various studies
have all flaunted the potentials of internet and mobile phones for financial inclusion. An important
question therefore is ‘‘Can theinternet and mobile phones spur the inclusion of the financially excluded
poor? This study therefore aims to examine the relationship and causality between internet, mobile
phonesand financial inclusion in Africa for the 2000-2016 period.
Design/methodology/approach –The empiricalanalysis followed these three steps:examination of the
stationarity of the variables;testing for the cointegration; and evaluationof the effects of the internet and
mobile phones on financial inclusion in Africa for the 2000-2016 period using three outcomes of panel
FMOLS approachand Granger causality tests.
Findings –The empirical evidence shows that internet and mobile phones have significant positive
relationship with financial inclusion, meaning that rising levels of internet and mobile phones are
associated with increased financial inclusion. There is also uni-directional causality from internet and
mobile phones to financialinclusion, implying that internet and mobile phonescause financial inclusion.
The study also shows that macroeconomic factors such as capital formation, primary enrollment, bank
credit, broad money,population growth, remittances, agricultureand interest rate, as well as institutional
factorssuch as regulatory quality are important underlyingfactors for financial inclusion in Africa.
Originality/value –In the literature, there is a dearth of research on the internet, mobile phones and
financialinclusion, especially in Africa. Most of the relatedstudies are conceptual andmicro-based, with
little empirical attention to the relationship and causality between internet, mobile phones and financial
inclusion. In fact, this dearth of rigorous empirical studies has been attributed as the main cause of
inadequatepolicy guidancein enhancinginformation communication technologies (Roycroft and Anantho,
2003), despitesaturationlevels in developedeconomies.This study fillsthe gap by evaluatingthe effectsof
theInternet and mobilephones on financialinclusionfor 44 Africancountries for the2000-2016 period.
Keywords Internet, Africa, Financial inclusion, Mobile phones
Paper type Research paper
1. Introduction
Can the internet and mobile phones spur the inclusion of the financially excluded poor?
Generally, banking has document requirements and also cost to maintain. In Africa, where
more than 33 per cent of the population live in extreme poverty and 36 per cent are
illiterates, opening a bank account is hard and not available for a large number of people
(World Bank, 2017). However, Africa has recently witnessed growing mobile broadband
networks, which has the potential to boost access to a broad spectrum of financial services
and to better the lives of individuals across the continent. Anyone can within a few minutes
get a prepaid SIM card, and start using mobile broadband and mobile money[1]. This
dramatic rise in mobile internet calls for an investigation of its potentials. One facet of such
potentials is its ability to spur financialinclusion.
Financial inclusion means that individuals and businesses have access to affordable
financial products and services –payments, transactions, savings, credit and insurance
Olaniyi Evans is based at
the Department of
Management and Social
Sciences, Pan-Atlantic
University, Lagos, Nigeria.
JEL classification –G21, G28,
C33
Received 28 April 2018
Revised 18 June 2018
Accepted 7 July 2018
PAGE 568 jDIGITAL POLICY, REGULATION AND GOVERNANCE jVOL. 20 NO. 6 2018, pp. 568-581, ©EmeraldPublishing Limited, ISSN 2398-5038 DOI 10.1108/DPRG-04-2018-0018
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