Abstract:
A large body of research shows that mobile money through its agent
networks can potentially increase financial inclusion, especially in the unbanked
rural regions of the developing world. This study intends to establish whether
agent liquidity has a significant moderating effect in the relationship between
mobile money services and financial inclusion of the unbanked poor population in
rural sub-Saharan Africa. The data were collected from mobile money users
through a cross-sectional approach using a semi-structured quantitative questionnaire and Analysis of Moment Structures was used to test for the moderating
effect of agent liquidity between mobile money services and financial inclusion.
The results revealed a significant moderating effect of agent liquidity in the
relationship between mobile money services and financial inclusion of the unbanked poor population in rural sub-Saharan Africa with data collected from
rural Uganda. Agent liquidity enhances access to and usage of mobile money
services by 27 percentage points to spur financial inclusion among the unbanked
rural poor population. Similarly, agent liquidity has a direct significant effect on
access to and usage of mobile money services among the unbanked rural poor
population. Overall, the results showed that agent liquidity plays a significant and
positive moderating role between mobile money services and financial inclusion. The
findings from this study can help mobile money providers to increase the amounts of
float to boost agent liquidity to meet instant cash-in and cash-out demands of
customers. Besides, regulations on mobile money agents should be loosen to allow
more village “dukas” (small village shops) to offer mobile money financial services to
crowd-in more unbanked rural poor population into the digital financial system.
