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<p>This paper investigates the impact of mobile money access on informal businesses in sub-Saharan Africa. While mobile money can improve business performance and facilitate transactions, it may also enable labor informality. I examine this trade-off by studying solo entrepreneurs and small business owners in Kenya, Nigeria, Tanzania, and Uganda between 2013 and 2015. Using two complementary instrumental variable strategies—fuzzy RDD based on cellular coverage boundaries and distance to mobile money agents—I find consistent evidence that mobile money access increases formalization by 2.3–3.1 percentage points, specifically among entrepreneurs in Kenya, Tanzania, and Uganda, but not necessarily in Nigeria. The paper also explores the broader effects of mobile money access. Mobile money is associated with lower poverty levels, particularly for informal entrepreneurs, and promotes higher formalization rates for previously unbanked entrepreneurs. Additionally, the study reveals network effects, where neighbors’ mobile money adoption influences individual entrepreneurs’ decisions to formalize their businesses.</p>

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Mobile Money, Entrepreneurship, and Informality

  • 期刊论文

  • 发表日期：

    2025年10月16日

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  • Alina Malkova

摘要

This paper investigates the impact of mobile money access on informal businesses in sub-Saharan Africa. While mobile money can improve business performance and facilitate transactions, it may also enable labor informality. I examine this trade-off by studying solo entrepreneurs and small business owners in Kenya, Nigeria, Tanzania, and Uganda between 2013 and 2015. Using two complementary instrumental variable strategies—fuzzy RDD based on cellular coverage boundaries and distance to mobile money agents—I find consistent evidence that mobile money access increases formalization by 2.3–3.1 percentage points, specifically among entrepreneurs in Kenya, Tanzania, and Uganda, but not necessarily in Nigeria. The paper also explores the broader effects of mobile money access. Mobile money is associated with lower poverty levels, particularly for informal entrepreneurs, and promotes higher formalization rates for previously unbanked entrepreneurs. Additionally, the study reveals network effects, where neighbors’ mobile money adoption influences individual entrepreneurs’ decisions to formalize their businesses.