Financial innovation in developing countries: the determinants of mobile banking and financial development in Africa

Abstract

This study addresses issues of financial innovation in developing countries by focusing on the determinants of mobile banking development in Africa. Collecting data on mobile banking in different countries through national and international institutions and organizations in the geographical area of the study (Sub-Saharan Africa) in order to investigate the determinants of mobile banking development. The theoretical analysis shows that there is a positive correlation between the different mobile banking indicators and the mobile banking development indicators. Overall, the estimates of the four models point to the following determinants: human capital development, reliable monetary policy, infrastructure development, facilitation of remittances, urbanization, trade openness and promotion of banks' access to domestic credit. Furthermore, the results of our robustness check are not controversial. The general recommendation to African governments is that they should seek good performance by implementing specific and well-conditioned economic policies based on the determinants highlighted above.

JEL Classification: G11, G21, O31, O55

Paper type: Theoretical Research