Effects of the Mobile Money Services on Kenyan Economic Growth

Abstract

Using labor and capital as control variables, the study's overall objective was to determine whether mobile money services have an effect on Kenya's economic growth. Its specific objectives, however, were to determine whether active mobile money subscriptions, mobile money agents, and the value of transfers made through mobile money services had an effect on Kenyan economic growth. To determine the relationship between the dependent and independent variables, the study used the financial intermediation theory and the saving investment theory. The theory of endogenous growth, which analyzes the relationship between technical advancement and economic growth, elaborated on the phenomenon of mobile money transfer services in great detail. The study used an explanatory research methodology that focuses on the economic effects of mobile money services. The agents, mobile money transactions, and number of subscriptions were collected from the Kenya National Bureau of Statistics (KNBS) and the Central Bank of Kenya (CBK) for a period spanning January 2014 to December 2021 and used as independent variables in the STATA analysis, the dependent variable was economic growth. Descriptive statistics were used to summarize the findings, which were then displayed in tables and inferred from. According to the study, the number of active mobile money agents and subscriptions had little influence on economic growth. On the other hand, the value of mobile money transfers significantly and favorably impacted economic growth. The report urges policymakers to develop measures that promote the usage of mobile money transfers, which will mostly result in the creation of jobs and further lowering of the nation's poverty levels.