Working Paper #2021-043
Mobile money adoption and entrepreneurs’ access to trade credit in the informal sector
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.
- Keywords
-
- Entrepreneurship
- Financial Innovation
- Mobile Money
- Trade Credit
- JEL codes
-
- D14
- G21
- L26
- O16
- O33
Cite this as
APA 7th ed.Tetteh, G., Goedhuys, M., Konte, M., & Mohnen, P. (2021). Mobile money adoption and entrepreneurs’ access to trade credit in the informal sector (UNU-MERIT Working Paper No. 2021-043). UNU-MERIT. https://unu-merit.nl/publications/working-papers/abstract/?id=9107