The Role of Mobile Money Banking Service in Financial Development: Evidence from Ghana

Andrew Osei Agyemang, Angelina Kissiwaa Twum, Joseph Dery Nyeadi, Joseph Owusu Amoah, and Anasford Nti Appau

Article history:
Received: 12 February, 2020
Accepted: 15 September, 2022


Mobile money services have shown to be quite beneficial in enhancing and promoting the fundamental responsibilities of the banking sector by establishing and meeting the financial needs of the unbanked and making different financial instruments accessible. An increase in mobile money services is vital for economic success in the financial industry. Before mobile money services were introduced in Ghana, formal banking services had little access to individuals, particularly in rural communities. The study employed a quantitative research design using secondary data sources for the analysis. Monthly time series from 2012 to 2020 was used for the empirical analysis. The study utilized the Vector Error Correction Model (VECM) estimation technique to show the short-run and long-run relationship among the integrated variables. The results from the primary model for the long-run relationship revealed that the number of active mobile money account users has a positive and statistically significant relationship with the proportion of domestic credit to private sector (DCPS). Similarly, the number of active mobile money agents revealed a positive and significant relationship with DCPS. Also, a positive and significant relationship was found between the total volume of transactions and DCPS in Ghana. The findings add to existing literature and give policymakers a clue about improving mobile money services in Ghana.

Financial Development; Financial Services; Mobile Money Services; Ghana

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