Mobile Money, Financial Inclusion and Insurance Sector Development in Africa

Abstract

Around 2.5 billion people throughout the world do not have access to traditional financial services. This is now possible thanks to mobile money for many unbanked individuals to be able to make financial transactions. There are also plans to broaden the scope of these financial services in the insurance industry. This study aims to understand the interactive effect of financial inclusion in the mobile money and insurance nexus. It also tries to further appreciate the importance of mobile money on inclusive finance and also takes a look at the individual effect of financial inclusion and mobile money on the insurance industry. The importance that the research conducted on theAfrican insurance industry aims to encourage the usage of mobile money and understand its effect on the sector. This study utilizes System GMM as an estimating technique. The decision to implement this strategy is based onthe various arguments that have been presented in previous research. The study revealed that mobile money has an important effect on inclusive finance in Africa, with all of its s having a positive effect. It also found no evidence that mobile money development has affected the insurance sector in the continent. The study also noted that inclusive finance could help the development of the insurance industry in Africa. It said that the relationship between insurance and mobile money could be moderated by this new technology.