Understanding the determinants of mobile money usage and its effect on firm performance: Cross-Country evidence from Sub-Saharan Africa

A growing number of studies have examined the roles of mobile money usage in relation to firms’ outcomes, but little emphasis has been placed on the cross-country determinants of mobile money usage as well as its impact on firms’ performance. This paper examines the determinants of mobile money usage and its impacts on firms’ total sales and profits (proxied as firm performance) using a sample of firms across 14 countries in sub-Saharan Africa. To investigate the determinants or drivers of mobile money usage by firms in sub-Saharan Africa, this paper adopts both the ordinary least squares (OLS) method, probit model, ordered probit model approach. The paper identifies a few variables (factors) such as firm level as well as macro-level variables as determinants of mobile money usage by firms. In addition, this paper estimates the impact of mobile money on firms’ performance by adopting the ordinary least squares, and an instrumental variable (IV) estimation approach. Further, using the OLS and IV approaches, the paper finds statistically significant effect of mobile money usage on firms’ performance for the sample of firms in our analysis. The findings lend credence to the growing consensus about the relevance of mobile money in addressing issues of credit constraint of firms and its implications on firms’ performance in developing countries, especially in the context of sub-Saharan Africa.

URI

https://bradscholars.brad.ac.uk/handle/10454/20852

Version

Published version

Citation

Ajefu JB and Rasoarivao A (2026) Understanding the determinants of mobile money usage and its effect on firm performance. AERC Working Paper Series. Working paper No. 33/2026. Nairobi: African Economic Research Consortium.

Link to published version

https://publication.aercafricalibrary.org/handle/123456789/4059

Type

Working Paper