article · Journal of Economic Structures
Access to mobile network infrastructure significantly increases the adoption of digital financial services and boosts financial inclusion across sub-Saharan Africa. An analysis combining mobile tower proximity with survey data from nine nations reveals a positive relationship between network coverage and digital finance usage. Infrastructure requirements vary according to local financial ecosystems. In markets driven by mobile-led innovations, such as Tanzania, older network standards like GSM and UMTS deliver greater financial inclusion benefits because prevalent tools, including mobile money and e-wallets, operate without an internet connection. Conversely, in regions where financial innovations are bank-led, high-speed LTE coverage generates a stronger impact. Simulations indicate that universal proximity to LTE towers within two kilometres would increase financial inclusion by six percent in Mozambique and three percent in Ghana, Rwanda, and Senegal. These differences underline the need to align telecommunications investments with regional market characteristics.
Digital finance supports economic growth, welfare, and efficient transactions, yet connectivity barriers persist. Understanding the specific network technologies required to boost financial access allows governments and development organisations to prioritise infrastructure spending effectively. By demonstrating that high-end internet connectivity is not universally required for financial inclusion, these findings offer clear guidance for designing policies and telecoms investments tailored to the needs of lower-income populations.
This research provides applied insights for telecommunications operators, digital finance providers, and policymakers seeking to target infrastructure rollout. Operators and fintech firms can use these findings to match network technology investments with regional product types, such as offline mobile money or data-reliant banking applications. As an empirical analysis of consumer behaviour and telecoms coverage, the work offers strategic guidance that is ready to inform real-world infrastructure planning and commercial network deployment.
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Abstract Digital finance plays a major role in improving access to, usage and quality of financial services in developing countries. The use of these platforms has been associated with a positive impact on economic growth and people’s welfare. They allow for convenient, secure, and efficient transaction and are the crucial element of e-commerce. In this paper, we analyse the effect of mobile network coverage on adoption of financial technologies and financial inclusion using a survey data of 12,735 individuals from nine sub-Saharan African countries conducted in 2017. By combining survey data with information on the proximity of mobile network towers, we estimate a two-stage model. In the first stage, consumers decide to adopt a technology device, and in the second stage, they decide whether to use digital financial services or not. Results show a significant and positive relationship between network coverage and adoption of digital financial services. Considering that the whole population lives within 2 km radius from the LTE tower, financial inclusion would increase by 6% in Mozambique and 3% in Ghana, Rwanda and Senegal. In Tanzania, where mobile money is the common financial service, investment in GSM and UMTS would have a larger impact on financial inclusion than LTE. These results show that digital financial technologies such as mobile money, mobile banking and e-wallet, that do not necessarily require consumers to be connected to the Internet have a greater impact on financial inclusion in East African countries, where financial service innovations are mobile led. However, in countries where digital financial innovations are bank led, LTE coverage have a greater impact than GSM and UMTS coverage. The findings of this study can help policy-makers to understand the issues related to the expansion of digital financial services and effective strategies to deliver these services to the poor.
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DOI: 10.1186/s40008-023-00326-7
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