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Panel Econometric Analysis on Mobile Payment Transactions and Traditional Banks Effort toward Financial Accessibility in Sub-Sahara Africa

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  • Cephas Paa Kwasi Coffie

    (School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 610054, China
    Center of West African Studies, University of Electronic Science and Technology of China, Chengdu 610054, China)

  • Hongjiang Zhao

    (School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 610054, China
    Center of West African Studies, University of Electronic Science and Technology of China, Chengdu 610054, China)

  • Isaac Adjei Mensah

    (Institute of Applied Systems Analysis (IASA), Faculty of Science, Jiangsu University, Zhenjiang 212013, China)

Abstract

The financial landscape of sub-Sahara Africa is undergoing major changes due to the advent of FinTech, which has seen mobile payments boom in the region. This paper examines the salient role of mobile payments in traditional banks’ drive toward financial accessibility in sub-Sahara Africa by using panel econometric approaches that consider the issues of independencies among cross-sectional residuals. Using data from the World Development Index (WDI) 2011–2017 on 11 countries in the region, empirical results from cross-sectional dependence (CD) tests, panel unit root test, panel cointegration test, and the fully modified ordinary least squares (FMOLS) approach indicates that (i) the panel time series data are cross-sectionally independent, (ii) the variables have the same order of integration and are cointegrated, and (iii) growth in mobile payment transactions had a significant positive relationship with formal account ownership, the number of ATMs, and number of new bank branches in the long-run. The paper therefore confirms that the institutional structure of traditional banks that makes them competitive, irrespective of emerging disruptive technologies, has stimulated overall financial accessibility in the region leading to overall sustainable growth in the financial sector. We conclude the paper with feasible policy suggestions.

Suggested Citation

  • Cephas Paa Kwasi Coffie & Hongjiang Zhao & Isaac Adjei Mensah, 2020. "Panel Econometric Analysis on Mobile Payment Transactions and Traditional Banks Effort toward Financial Accessibility in Sub-Sahara Africa," Sustainability, MDPI, vol. 12(3), pages 1-20, January.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:3:p:895-:d:312944
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    Cited by:

    1. Anna Crisci & Luana Serino & Francesco Campanella, 2024. "Graphical diagnostics in proportional odds models—Empirical study on determinants of FinTech payment service diffusion by SMEs in Italy," Quality & Quantity: International Journal of Methodology, Springer, vol. 58(6), pages 5755-5776, December.
    2. Horim Kim & Jaeyoung Kim & Kyungmyung Jang & Jaemin Han, 2020. "Are the Blockchain-Based Patents Sustainable for Increasing Firm Value?," Sustainability, MDPI, vol. 12(5), pages 1-17, February.
    3. Alfonso Siano & Lukman Raimi & Maria Palazzo & Mirela Clementina Panait, 2020. "Mobile Banking: An Innovative Solution for Increasing Financial Inclusion in Sub-Saharan African Countries: Evidence from Nigeria," Sustainability, MDPI, vol. 12(23), pages 1-24, December.
    4. Junhai Wang, 2021. "Impact of mobile payment on e-commerce operations in different business scenarios under cloud computing environment," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 12(4), pages 776-789, August.
    5. Maiya M. Suyunchaliyeva & Raghav Nautiyal & Aijaz A. Shaikh & Ravishankar Sharma, 2021. "The Use of Mobile Payment Systems in Post-COVID-19 Economic Recovery: Primary Research on an Emerging Market for Experience Goods," Sustainability, MDPI, vol. 13(24), pages 1-19, December.
    6. Joshua Dzankar Zoaka & Hasan Güngör, 2023. "Effects of financial development and capital accumulation on labor productivity in sub-Saharan Africa: new insight from cross sectional autoregressive lag approach," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-18, December.
    7. Nathanael Ojong & Simplice A. Asongu, 2021. "COVID-19 Global Pandemic, Financial Development and Financial Inclusion," Working Papers 21/078, European Xtramile Centre of African Studies (EXCAS).
    8. Dennis Owusu Amofah & Junwu Chai, 2022. "Sustaining Consumer E-Commerce Adoption in Sub-Saharan Africa: Do Trust and Payment Method Matter?," Sustainability, MDPI, vol. 14(14), pages 1-20, July.
    9. Coffie, Cephas Paa Kwasi & Hongjiang, Zhao, 2023. "FinTech market development and financial inclusion in Ghana: The role of heterogeneous actors," Technological Forecasting and Social Change, Elsevier, vol. 186(PA).

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