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

IMF Working Papers, April 1, 2011

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

Sample period: 1988 to 2007.
Geographic focus: a sample of African countries.
Primary research question: impact of information and communication technologies (ICT), especially mobile phone rollout, on economic growth; and whether financial inclusion is a channel through which mobile phone development influences economic growth.
ICT indicators used:
- mobile telephone penetration rates,
- fixed telephone penetration rates,
- the cost of local calls.
Financial inclusion measures:
- 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).
Econometric approach:
- System Generalized Method of Moment (GMM) estimator to address endogeneity issues.

ICT, including mobile phone development, contribute significantly to economic growth in African countries.
Part of the positive effect of mobile phone penetration on growth operates through greater financial inclusion.
The development of mobile phones consolidates the impact of financial inclusion on economic growth, especially in countries where mobile financial services take hold.

Source: ICT, Financial Inclusion, and Growth: Evidence from African Countries, IMF Working Papers.