Financial Inclusion in Emerging Markets Through Mobile Money – A Configurational Analysis

Abstract

In the last decade, mobile money has financially included millions of unbanked people in emerging countries. However, neither country-level institutions nor firm-level strategies alone offer satisfactory explanations for mobile money’s successful and widespread adoption. We therefore analyze which combinations of firm- and country-level factors explain the successful adoption of mobile money services? We perform a fuzzy-set Qualitative Comparative Analysis on a sample of 96 mobile money deployments in 43 emerging countries. Our findings reveal four distinct recipes for success: ‘Oligopolists’, two variations of ‘Enabling Environments’, and ‘Fintechs’. Oligopolists can be successful irrespective of enabling institutions, if institutional voids are large. Two variations of enabling environments suggest that in most cases either enabling regulation or sufficient mobile and educational infrastructure are key for success. Lastly, a small group of fintechs are successful despite relatively developed financial services sector because the offer technologically sophisticated use cases. These findings provide recipes of how financial inclusion is most achievable in various combinations of firm- and country-level factors and they offer insights for policy makers regarding the necessary institutional framework. Furthermore, we contribute to theory by mobilizing institutional theory to demonstrate the ambiguous nature of institutions for firms with an inclusive business model.