Photo: Nipah Dennis Source: Getty Images
A new study co-funded by ReFinD reveals that the randomised entry of mobile money vendors into Ghana’s local markets leads to significant improvements in firm conduct, service quality, and a decrease in price-cost markups, benefiting consumers. The research also provides evidence of within-market revenue reallocation, a 20% increase in revenues for non-financial goods and services, and overall growth in the service industry.
The study, led by ReFinD Scientific Committee Member Prof. Francis Annan and conducted in partnership with Ghana’s two largest mobile money providers, highlights how the strategic introduction of mobile money vendors creates a “services multiplier” effect, boosting revenues across both financial and non-financial sectors.
Using a three-step randomised design, the researchers introduced mobile money vendors—who also sell non-financial goods and services—into various markets across Ghana. This approach enabled the measurement of the vendors’ impact while controlling for pre-existing market conditions. The results revealed improved service quality, reduced prices, and broader economic gains.
The findings highlight the potential of strategic market of mobile money vendors’ entry in driving economic growth and improving consumer welfare.
The findings underscore the transformative potential of strategically introducing mobile money vendors to stimulate local economies. By reallocating market revenues, expanding business activity, and increasing household spending, the entry of these vendors generates economic benefits that extend well beyond financial services. Notably, the 20% revenue growth in non-financial services underscores the broad impact on local market dynamics. The publication can be accessed here.