Transparency and Financial Inclusion: Experimental Evidence from Mobile Money (revision of CentER DP 2018-042)

Patricio Dalton, H. Pamuk, R. Ramrattan, Daan van Soest, Burak Uras

Research output: Working paperDiscussion paperOther research output

30 Downloads (Pure)

Abstract

Electronic payment instruments have the potential to spur the transparency of business transactions and thereby reduce information frictions. We design a field experiment to understand whether e-payments facilitate the financial inclusion of SMEs in developing world and to study adoption barriers. We encourage a random sample of Kenyan merchants to adopt a new mobile-money payment instrument and find that the decision to adopt is hampered by the combination of information, know-how and seemingly small transaction costs barriers. In addition, we nd that business owners who are more averse to transparency are more reluctant to adopt. Sixteen months after the intervention, we observe that treated firms have better access to finance in the form of mobile loans. The impact on financial access is more pronounced for smaller establishments, which also experience a considerable reduction in sales volatility. We conclude that e-payments can help un-collateralized firms become transparent and get financially integrated.
Original languageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages73
Volume2019-032
Publication statusPublished - 6 Nov 2019

Publication series

NameCentER Discussion Paper
Volume2019-032

Fingerprint

Transparency
Financial inclusion
Payment
Payment instruments
Loans
Access to finance
Field experiment
Transaction costs
Friction
Developing world
Electronic payment
Small and medium-sized enterprises
Integrated
Owners
Merchants

Keywords

  • SME Finance
  • Transparency
  • payment technologies
  • Lipa Na M-Pesa

Cite this

Dalton, P., Pamuk, H., Ramrattan, R., van Soest, D., & Uras, B. (2019). Transparency and Financial Inclusion: Experimental Evidence from Mobile Money (revision of CentER DP 2018-042). (CentER Discussion Paper; Vol. 2019-032). Tilburg: CentER, Center for Economic Research.
Dalton, Patricio ; Pamuk, H. ; Ramrattan, R. ; van Soest, Daan ; Uras, Burak. / Transparency and Financial Inclusion : Experimental Evidence from Mobile Money (revision of CentER DP 2018-042). Tilburg : CentER, Center for Economic Research, 2019. (CentER Discussion Paper).
@techreport{98cf07418e784bbaa2704b1ee857cd39,
title = "Transparency and Financial Inclusion: Experimental Evidence from Mobile Money (revision of CentER DP 2018-042)",
abstract = "Electronic payment instruments have the potential to spur the transparency of business transactions and thereby reduce information frictions. We design a field experiment to understand whether e-payments facilitate the financial inclusion of SMEs in developing world and to study adoption barriers. We encourage a random sample of Kenyan merchants to adopt a new mobile-money payment instrument and find that the decision to adopt is hampered by the combination of information, know-how and seemingly small transaction costs barriers. In addition, we nd that business owners who are more averse to transparency are more reluctant to adopt. Sixteen months after the intervention, we observe that treated firms have better access to finance in the form of mobile loans. The impact on financial access is more pronounced for smaller establishments, which also experience a considerable reduction in sales volatility. We conclude that e-payments can help un-collateralized firms become transparent and get financially integrated.",
keywords = "SME Finance, Transparency, payment technologies, Lipa Na M-Pesa",
author = "Patricio Dalton and H. Pamuk and R. Ramrattan and {van Soest}, Daan and Burak Uras",
note = "CentER Discussion Paper Nr. 2019-032",
year = "2019",
month = "11",
day = "6",
language = "English",
volume = "2019-032",
series = "CentER Discussion Paper",
publisher = "CentER, Center for Economic Research",
type = "WorkingPaper",
institution = "CentER, Center for Economic Research",

}

Dalton, P, Pamuk, H, Ramrattan, R, van Soest, D & Uras, B 2019 'Transparency and Financial Inclusion: Experimental Evidence from Mobile Money (revision of CentER DP 2018-042)' CentER Discussion Paper, vol. 2019-032, CentER, Center for Economic Research, Tilburg.

Transparency and Financial Inclusion : Experimental Evidence from Mobile Money (revision of CentER DP 2018-042). / Dalton, Patricio; Pamuk, H.; Ramrattan, R.; van Soest, Daan; Uras, Burak.

Tilburg : CentER, Center for Economic Research, 2019. (CentER Discussion Paper; Vol. 2019-032).

Research output: Working paperDiscussion paperOther research output

TY - UNPB

T1 - Transparency and Financial Inclusion

T2 - Experimental Evidence from Mobile Money (revision of CentER DP 2018-042)

AU - Dalton, Patricio

AU - Pamuk, H.

AU - Ramrattan, R.

AU - van Soest, Daan

AU - Uras, Burak

N1 - CentER Discussion Paper Nr. 2019-032

PY - 2019/11/6

Y1 - 2019/11/6

N2 - Electronic payment instruments have the potential to spur the transparency of business transactions and thereby reduce information frictions. We design a field experiment to understand whether e-payments facilitate the financial inclusion of SMEs in developing world and to study adoption barriers. We encourage a random sample of Kenyan merchants to adopt a new mobile-money payment instrument and find that the decision to adopt is hampered by the combination of information, know-how and seemingly small transaction costs barriers. In addition, we nd that business owners who are more averse to transparency are more reluctant to adopt. Sixteen months after the intervention, we observe that treated firms have better access to finance in the form of mobile loans. The impact on financial access is more pronounced for smaller establishments, which also experience a considerable reduction in sales volatility. We conclude that e-payments can help un-collateralized firms become transparent and get financially integrated.

AB - Electronic payment instruments have the potential to spur the transparency of business transactions and thereby reduce information frictions. We design a field experiment to understand whether e-payments facilitate the financial inclusion of SMEs in developing world and to study adoption barriers. We encourage a random sample of Kenyan merchants to adopt a new mobile-money payment instrument and find that the decision to adopt is hampered by the combination of information, know-how and seemingly small transaction costs barriers. In addition, we nd that business owners who are more averse to transparency are more reluctant to adopt. Sixteen months after the intervention, we observe that treated firms have better access to finance in the form of mobile loans. The impact on financial access is more pronounced for smaller establishments, which also experience a considerable reduction in sales volatility. We conclude that e-payments can help un-collateralized firms become transparent and get financially integrated.

KW - SME Finance

KW - Transparency

KW - payment technologies

KW - Lipa Na M-Pesa

M3 - Discussion paper

VL - 2019-032

T3 - CentER Discussion Paper

BT - Transparency and Financial Inclusion

PB - CentER, Center for Economic Research

CY - Tilburg

ER -

Dalton P, Pamuk H, Ramrattan R, van Soest D, Uras B. Transparency and Financial Inclusion: Experimental Evidence from Mobile Money (revision of CentER DP 2018-042). Tilburg: CentER, Center for Economic Research. 2019 Nov 6. (CentER Discussion Paper).