An evaluation of mobile banking as a tool for enhancing financial inclusion in Namibia: A case of FNB Namibia
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Date
2020
Authors
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Journal ISSN
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Publisher
University of Namibia
Abstract
Financial inclusion is a multi-dimensional concept of financial development that
enables affordable access through availability and equality of opportunities to access
financial services, especially among previously disadvantaged social groups. Namibia
has one of the most developed financial systems in Africa, and is blessed with a well run payment system. Yet, Namibia has failed to fully leverage its mobile penetration
rate of 97% to deploy financial solutions that can provide an interoperable platform
for financial inclusion. As such, this study uses data from a population of the more
than 1,2 million mobile banking customers on the FNB Cell phone banking and E wallet platforms in the period July 2012 to December 2019 (89 months). However, the
sample size was restricted by privacy concerns, which saw the study using 74% (66/89
months) of data in the period July 2012 to December 2017 (66 months). The study
used a cross-sectional time-series econometric analysis to test Granger causality
relationships between mobile banking and financial inclusion. The study found that at
the 95% level of confidence, there were significant mean differences (MD) between
the unbanked and banked platforms, in terms of value-added services, cash out ratios
and financial inclusion channels on the mobile banking platforms. The study also
found that among the four identified financial inclusion channels, only Profit
Incentives and Financial Penetration channels could be enhanced with mobile banking.
While, the other two channels: Financial Access and Account Ownership, influenced
the rate of mobile phone adoption. The study concludes that the charge-based value added services provide the critical intermediation link as to how profit incentives can
enhance both mobile banking services and financial inclusion in Namibia. The study
recommends that regulators should provide profitability incentives to the banks and
other e-money service-providers, as profitable mobile banking platforms can be used
as effective tools for enhancing financial inclusion of the unbanked population
Description
A research thesis submitted in partial fulfilment of the requirements for the Degree of Master of Business Administration
Keywords
Financial inclusion, Mobile money transfer, Cell-phone banking, Mobile wallets, Unbanked populations, Namibia, University of Namibia