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Working Paper 323 - Mobile Financial and Banking Services Development in Africa
Using a new database for mobile financial & banking services across countries, we analyze pro-poor and inclusive growth in developing countries and show the importance of mobile financial & banking development. This paper uses several econometric techniques to investigate mobile finance & banking benchmarking, determinants, and real impacts on inclusive growth in developing countries in Africa. The statistical benchmarking analysis reveals that there is a positive link between mobile banking development and economic development. Estimation of our model, using different specification and estimation techniques, shows the same result: a positive impact of mobile finance & banking development on both pro-poor and inclusive economic growth. These main findings suggest that policies to boost mobile finance & banking development in Africa should be viewed as measures that would yield fruit in the medium to long terms. Moreover, we find determinants of mobile finance & banking to be: banking sector domestic credit, human capital, remittances, credible monetary policy, infrastructure, and trade. Since mobile banking development matters for pro-poor and inclusive growth, African governments should pursue good performance in terms of these determinants by implementing specific and robust economic policies.