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Mobile money adoption and entrepreneurs’ access to trade credit in the informal sector

Author

Listed:
  • Tetteh, Godsway Korku

    (UNU-MERIT, Maastricht University)

  • Goedhuys, Micheline

    (UNU-MERIT, Maastricht University)

  • Konte, Maty

    (UNU-MERIT, Maastricht University, and Barnard College, Columbia University)

  • Mohnen, Pierre

    (UNU-MERIT, Maastricht University)

Abstract

Despite the contribution of previous studies to unravel the implications of mobile money in the developing world, the effect of this innovation on an important source of external finance, trade credit, has not been properly accounted for particularly in the informal sector. Using the 2016 FinAccess Household Survey, we investigate the relationship between mobile money adoption and the probability to receive goods and services on credit from suppliers based on a sample of entrepreneurs who operate informal businesses. We further explore the effect of mobile money adoption on the likelihood to offer goods and services on credit to customers. Our estimations suggest that entrepreneurs with mobile money are more likely to receive goods and sesrvices on credit from suppliers. We also find a positive and significant relationship between mobile money adoption and the likelihood to offer goods and services on credit to customers. The evidence supports the promotion of mobile money adoption among entrepreneurs in the informal sector to facilitate access to credit.

Suggested Citation

  • Tetteh, Godsway Korku & Goedhuys, Micheline & Konte, Maty & Mohnen, Pierre, 2021. "Mobile money adoption and entrepreneurs’ access to trade credit in the informal sector," MERIT Working Papers 2021-043, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2021043
    as

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    File URL: https://unu-merit.nl/publications/wppdf/2021/wp2021-043.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Entrepreneurship; Financial Innovation; Mobile Money; Trade Credit;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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