Panel Econometric Analysis on Mobile Payment Transactions and Traditional Banks Effort toward Financial Accessibility in Sub-Sahara Africa
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...
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doaj-c3d2daa8fb97453cbfad639dc65275002020-11-25T03:32:39ZengMDPI AGSustainability2071-10502020-01-0112389510.3390/su12030895su12030895Panel Econometric Analysis on Mobile Payment Transactions and Traditional Banks Effort toward Financial Accessibility in Sub-Sahara AfricaCephas Paa Kwasi Coffie0Hongjiang Zhao1Isaac Adjei Mensah2School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 610054, ChinaSchool of Management and Economics, University of Electronic Science and Technology of China, Chengdu 610054, ChinaInstitute of Applied Systems Analysis (IASA), Faculty of Science, Jiangsu University, Zhenjiang 212013, ChinaThe 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.https://www.mdpi.com/2071-1050/12/3/895mobile paymenttraditional banksfinancial accessfintechsub-sahara africa |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Cephas Paa Kwasi Coffie Hongjiang Zhao Isaac Adjei Mensah |
spellingShingle |
Cephas Paa Kwasi Coffie Hongjiang Zhao Isaac Adjei Mensah Panel Econometric Analysis on Mobile Payment Transactions and Traditional Banks Effort toward Financial Accessibility in Sub-Sahara Africa Sustainability mobile payment traditional banks financial access fintech sub-sahara africa |
author_facet |
Cephas Paa Kwasi Coffie Hongjiang Zhao Isaac Adjei Mensah |
author_sort |
Cephas Paa Kwasi Coffie |
title |
Panel Econometric Analysis on Mobile Payment Transactions and Traditional Banks Effort toward Financial Accessibility in Sub-Sahara Africa |
title_short |
Panel Econometric Analysis on Mobile Payment Transactions and Traditional Banks Effort toward Financial Accessibility in Sub-Sahara Africa |
title_full |
Panel Econometric Analysis on Mobile Payment Transactions and Traditional Banks Effort toward Financial Accessibility in Sub-Sahara Africa |
title_fullStr |
Panel Econometric Analysis on Mobile Payment Transactions and Traditional Banks Effort toward Financial Accessibility in Sub-Sahara Africa |
title_full_unstemmed |
Panel Econometric Analysis on Mobile Payment Transactions and Traditional Banks Effort toward Financial Accessibility in Sub-Sahara Africa |
title_sort |
panel econometric analysis on mobile payment transactions and traditional banks effort toward financial accessibility in sub-sahara africa |
publisher |
MDPI AG |
series |
Sustainability |
issn |
2071-1050 |
publishDate |
2020-01-01 |
description |
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. |
topic |
mobile payment traditional banks financial access fintech sub-sahara africa |
url |
https://www.mdpi.com/2071-1050/12/3/895 |
work_keys_str_mv |
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