| By: |
Dalton, Patricio (Tilburg University, Center For Economic Research);
Pamuk, H. (Tilburg University, Center For Economic Research);
Ramrattan, R.;
van Soest, Daan (Tilburg University, Center For Economic Research);
Uras, Burak (Tilburg University, Center For Economic Research) |
| Abstract: |
Electronic payment instruments have the potential to spur the transparency of
business transactions and thereby reduce information frictions. We design a
field experiment to understand whether e-payments facilitate the financial
inclusion of SMEs in developing world and to study adoption barriers. We
encourage a random sample of Kenyan merchants to adopt a new mobile-money
payment instrument and find that the decision to adopt is hampered by the
combination of information, know-how and seemingly small transaction costs
barriers. In addition, we nd that business owners who are more averse to
transparency are more reluctant to adopt. Sixteen months after the
intervention, we observe that treated firms have better access to finance in
the form of mobile loans. The impact on financial access is more pronounced
for smaller establishments, which also experience a considerable reduction in
sales volatility. We conclude that e-payments can help un-collateralized firms
become transparent and get financially integrated. |
| Keywords: |
SME Finance; Transparency; payment technologies; Lipa Na M-Pesa |
| JEL: |
D22 G00 G21 O33 |
| Date: |
2019 |
| URL: |
http://d.repec.org/n?u=RePEc:tiu:tiucen:98cf0741-8e78-4bba-a270-4b1ee857cd39&r=all |