Does mobile money promote financial inclusion in Eswatini?
International Journal of Social Economics
ISSN: 0306-8293
Article publication date: 28 May 2020
Issue publication date: 28 May 2020
Abstract
Purpose
Mobile money, a service permitting monetary value to be digitally stored in a mobile phone and transacted to others through text messaging, is increasingly becoming available in several African countries including Eswatini. This study examines the factors associated with mobile money usage and the extent to which mobile money accelerates financial inclusion in Eswatini.
Design/methodology/approach
Data were collected from the nationally representative FinScope Consumer Survey for Eswatini conducted in 2014. The authors use a quasi-experimental method in propensity score matching (PSM) with bootstrapped standard errors to alleviate the possibility of selection bias associated with mobile money use and bank account ownership. As a sensitivity check, the authors calculate the average treatment effect (ATE) using kernel-based matching methods, as well as estimate a multilevel model that accounts for the hierarchical structure of data.
Findings
The authors found that higher education, entrepreneurship, being female, improvement in work situation in the past year and living in urban area and in the Lubombo region all positively influence the probability to use mobile money. The results also show that individuals who use mobile money are 19% more likely to own a bank account at a formal financial institution with a higher probability estimate observed amongst rural residents.
Originality/value
This study examines whether mobile money accelerates financial inclusion in Eswatini. On analysing data from the 2014 FinScope Consumer Survey, the results show that mobile money does not seem to be accelerating the reach of financial services to those who are structurally excluded from the formal financial system and suggest the need for ongoing review of the financial inclusion strategies of the country to enhance access to financial services in underserved areas.
Peer review
The peer review history for this article is available at:https://publons.com/publon/10.1108/IJSE-12-2019-0723
Keywords
Acknowledgements
Funding: There was no funding for this study.The authors greatly acknowledge FinMark Trust for granting unlimited access to the 2014 FinScope consumer survey for Eswatini used in this study. All replication material for this paper will be made available upon a reasonable request. The views expressed in this article and any perceived errors and omissions are those of the authors and not reflective of the institutions of affiliation nor of FinMark Trust.
Citation
Myeni, S., Makate, M. and Mahonye, N. (2020), "Does mobile money promote financial inclusion in Eswatini?", International Journal of Social Economics, Vol. 47 No. 6, pp. 693-709. https://doi.org/10.1108/IJSE-05-2019-0310
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited