Mobile money: the savior for developing
Mobile money is a widely used financial service in Kenya. Nowhere else does mobile money have such an impact in a country. However, the impact of mobile money on key economic indicators is still an underexplored topic. This study tries to find out if mobile money affects monetary and financial stability in Kenya. To answer this question, two regression analyses were performed. A multiple OLSregression was used to answer the question of the effect on financial stability. The results of this research indicate that mobile money has no effect on financial stability in Kenya. On the other hand, an OLS- and VEC model answered the question of the effect on monetary stability. The results of this regression analyses indicate that mobile money has a positive relationship with real money demand in Kenya. This modifies the functioning of the monetary policy, which has a negative impact on monetary stability. It will therefore be reasonable for countries where mobile money is already widely represented, to include these effects of mobile money in their future policy design. Otherwise, their policies will not achieve their desired goals. A possible follow-up study could focus on another country or on the influence of the time period.
Faculteit der Managementwetenschappen