Mobile Money Regulation and Financial Behaviours of Rural Population: Evidence from sub-Saharan Africa

The rapid growth of mobile money has prompted the implementation of regulations aimed at managing associated risks. While previous research has shown that mobile money expands rural financial inclusion and behaviors, the effects of regulations on these behaviors have received limited attention. Against this background, this study investigates the impact of mobile money regulations on the financial behaviors of rural populations in sub-Saharan Africa. Analyzing individual-level data from 24 countries in the GSMA and Global Findex database, the research constructs a regulatory index to assess the overall regulatory environment, and the relative effect of the individual dimensions. Using linear probability model and the Lewbel two-stage instrumental variables (IV) estimation as robustness check, the study reveals that mobile money regulations significantly enhance saving and credit behaviors among rural populations, particularly females and those with lower educational attainment. Furthermore, the study finds that among the different aspects of mobile money regulations, consumer protection, and KYC rules are crucial in improving savings and credit access among rural residents. The study recommends that policymakers focus on improving the mobile money regulatory environment to promote inclusive financial practices within rural communities.