Telecommunications regulation, mobile money innovations and financial inclusion
| Date | 28 April 2023 |
| Pages | 503-521 |
| DOI | https://doi.org/10.1108/JFRC-01-2023-0003 |
| Published date | 28 April 2023 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation |
| Author | Simplice Asongu |
Telecommunications regulation,
mobile money innovations
and financial inclusion
Simplice Asongu
Department of Economics, University of South Africa, Pretoria, South Africa
Abstract
Purpose –This study aims to assess how corporate telecommunication (telecom) policies follow telecom
sector regulationin mobile money innovation for financial inclusion in developingcountries.
Design/methodology/approach –Telecom policies are understood in terms of mobile subscriptions,
mobile connectivity coverage and mobile connectivity performance, whereas mobile money innovations
represent mobilemoney accounts, the mobile used to send money and the mobile used to receivemoney. The
empiricalevidence is based on Tobit regressions.
Findings –Telecom sector regulationpositively influences mobile money innovations. From net influences,
mobile subscriptions and connectivity policies moderate telecom sector regulation to positively influence
mobile money innovations,exclusively within the remit of mobile money accounts because the corresponding
net influences on the mobile used to send money and the mobile used to receive money are negative. The
interactive influences are consistently negative, and hence, thresholds for complementary policies are
providedto maintainthe positiveinfluence of telecom sector regulation on mobile money innovations.
Originality/value –This study has complemented the extant literature by assessing how corporate
telecommunication policies follow telecommunication sector regulation in mobile money innovations for
financialinclusion.
Keywords Mobile money, Technology diffusion, Financial inclusion, Inclusive innovation,
Paper type Research paper
1. Introduction
The situation of this study within the context of extant literature on how corporate
telecommunication (telecom) policies follow telecom sector regulation in mobile money innovations
for financial inclusionin developing countries build on two principal motivations, notably:
(1) the importance of financial inclusion in development outcomes, especially in the
light of sustainable development goals (SDGs); and
(2) gaps in the extant literature.
(3) These two points are substantiated below.
Firstly, there is a growing body of evidencein the policy, theoretical and empirical literature
in support of the premise that digitalfinancial inclusion can spur more progress towards the
achievement of SDGs as well as provide avenues for the creation of a long-lasting socio-
economic impact for millionsof people in the world (United Nations, 2018;Tchamyou,2019).
According to the narrative, financial inclusionis related to a plethora of SDGs, inter alia: (i)
SDG1 linked to poverty eradication; (ii) SDG2 connected to the end of hunger, boosting of
JEL classification –D10, D14, D31, D60, O30
The author is indebted to the editor and reviewers for constructive comments.
Money
innovations
and financial
inclusion
503
Received10 January 2023
Revised12 March 2023
22March 2023
Accepted29 March 2023
Journalof Financial Regulation
andCompliance
Vol.31 No. 4, 2023
pp. 503-521
© Emerald Publishing Limited
1358-1988
DOI 10.1108/JFRC-01-2023-0003
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1358-1988.htm
sustainable agriculture and realization of food security; (iii) SDG3 related to health and
well-being; (iv) SDG5 connected to promoting gender equality and women empowerment;
(v) SDG8 linked to economic growth promotion; (vi) SDG9 linked to boosting the industry,
innovation and infrastructure; (vii) SDG10 concerned with inequality reduction; and (vii)
SDG17 focusing on boosting the implementation channels, especially as it concernsthe role
of financial inclusion through better investment, consumption and resources mobilization
with the ultimate purpose of promoting economic growth (Afutu-Kotey et al., 2017;Uduji
and Okolo-Obasi,2018a, 2018b;Abor et al.,2018;Asongu and Boateng, 2018;Gosavi, 2018;
Issahaku et al., 2018;Humbani and Wiese,2018;Tchamyou et al., 2019a,2019b;Abdulqadir
and Asongu, 2022;UNCD, 2022). Given the underlying importance of financial inclusion in
achieving a plethora of SDGs, the present studyfocuses on the role of mobile phone usage/
subscriptionsand mobile connectivity dynamics in the influence of telecomsector regulation
on mobile money innovations,not least, owing to an apparent gap in the extant literature [1].
Secondly, as far as we know, the extant literature on the importance of mobile phones in
outcomes of economic development has substantially focused on, amongst others, insights into
the relevance of banking through the mobile phone, especially in view of facilitating a bridge in
the rural-urban divide (Malaquias and Silva, 2020); banking related to the internet and
corresponding disincentives (Arif et al., 2020); the importance of technology in the nexus
between the customers and citizens (Lammi and Pantzar, 2020); poverty, inequality and
sustainable development externalities associated with information technology and financial
inclusion (Mushtaq and Bruneau, 2020;Hoque, 2020); characteristics of information technology
adoption (Karakara and Osabuohien, 2019;Alderete, 2020); and innovations in mobile telecom
for financial inclusion purpose (Lashitew et al., 2019;Asongu et al.,2020,2021a).
Of the highlighted studies, the closest strand to the present paper represent the works
from Asongu et al. (2020,2021a,2021b). Accordingly, Asongu et al. (2020,2021b) have
revisited Lashitew et al. (2019) by puttingemphasis on a concern of multi-collinearity that is
overlooked. The present study extends the underlying body of literature by assessing how
some supply-side mobile moneydrivers moderate the incidence of telecom sector regulation
on mobile money innovations. In other words, the main objective of the study is to
investigate how supply-side mobile drivers moderate the incidence of telecom sector
regulation on mobile money innovation dynamics such as mobile money accounts, the
mobile used to send money and the mobileused to receive money. The intuition and theory
supporting the underlyingnexuses are provided in Section 2.
Another distinguishing feature of this study with respect to the closest studies in the
literature (Lashitew et al.,2019;Asongu et al.,2020,2021a) is that the attendant literature on
which the present study is motivated is fundamentally based on linear additive models
which provide less room for policy implications. Accordingly, the present study buildson a
non-linear model understood within the framework of interactive regressions to provide
space for more policy implications. Hence, it is for the purpose of providing more room for
policy implications that the specifications in the empirical section are tailored such that
mobile phone usage/subscriptions and connectivity dynamics (i.e. mobile coverage and
performance) moderate the incidence of telecom sector regulation on mobile money
innovation dynamics (i.e. mobile money accounts, the mobile used to send money and the
mobile used for receive money). The policy relevance of the non-linear empirical strategy is
apparent from the thresholds for complementarypolicies that are provided in the empirical
results section. Moreover, by using mobile phone usage and connectivity dynamics as
moderating variables, the presentstudy also departs from Asongu et al. (2021b), which has
examined how the rule of law moderates mobile money factors for mobile money
innovations.
JFRC
31,4
504
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