Mobile Money and Financial Inclusion: The Role of Institutional Quality

This paper investigates the role of institutional quality in the relationship between mobile money and financial inclusion in Ghana from 2014 to 2021. It uses annual data from the World Development Indicators database on a bundle of four financial inclusion variables (ATMs per 100,000 adults; the number of bank branches per 100,000 adults; deposit accounts with commercial banks per 1,000 adults ; and account ownership at a financial institution or with a mobile money service provider), six institutional quality indicators (i.e., rule of law, governance effectiveness, control of corruption, voice and accountability, regulatory quality, and political stability), and total volume of mobile money transactions in a year. The baseline regression was employed. The empirical results reveal that institutional quality and mobile money have a direct positive and significant effect on financial inclusion. Also, institutional quality plays a positive and significant moderating role in the relationship between mobile money and financial inclusion. Furthermore, mobile phone subscription, financial development, inflation, and GDPGR influence financial inclusion.