ICT, Financial Inclusion, and Growth: Evidence from African Countries

By Kangni R Kpodar, Mihasonirina Andrianaivo

April 1, 2011

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Kangni R Kpodar, and Mihasonirina Andrianaivo. ICT, Financial Inclusion, and Growth: Evidence from African Countries, (USA: International Monetary Fund, 2011) accessed September 20, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper studies the impact of information and communication technologies (ICT), especially mobile phone rollout, on economic growth in a sample of African countries from 1988 to 2007. Further, we investigate whether financial inclusion is one of the channels through which mobile phone development influences economic growth. In estimating the impact of ICT on economic growth, we use a wide range of ICT indicators, including mobile and fixed telephone penetration rates and the cost of local calls. We address any endogeneity issues by using the System Generalized Method of Moment (GMM) estimator. Financial inclusion is captured by variables measuring access to financial services, such as the number of deposits or loans per head, compiled by Beck, Demirguc-Kunt, and Martinez Peria (2007) and the Consultative Group to Assist the Poor (CGAP, 2009). The results confirm that ICT, including mobile phone development, contribute significantly to economic growth in African countries. Part of the positive effect of mobile phone penetration on growth comes from greater financial inclusion. At the same time, the development of mobile phones consolidates the impact of financial inclusion on economic growth, especially in countries where mobile financial services take hold.

Subject: Financial inclusion, Financial services, Information technology in revenue administration, Mobile banking, Public expenditure review

Keywords: ICT development, ICT equipment, ICT rollout, ICT supply, ICT use, WP

Publication Details

Pages:

45
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2011/073
Stock No:

WPIEA2011073
ISBN:

9781455227068
ISSN:

1018-5941

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