Digital technologies and financial inclusion in WAEMU: Exploring heterogeneous effects across the distribution of financial inclusion
Keywords:
Financial Inclusion, ICT, Mobile Telephony, Internet, MMQR, WAEMUAbstract
This paper investigates the heterogeneous impact of Information and Communication Technologies (ICTs) on financial inclusion in the West African Economic and Monetary Union (WAEMU) over the period 2006–2022. To account for endogeneity, unobserved heterogeneity, and distributional differences across countries, the study employs the Method of Moments Quantile Regression (MMQR) approach. The findings reveal that ICT development significantly promotes financial inclusion, although the magnitude of the effects varies across the distribution of inclusion levels. Mobile telephony emerges as the most effective instrument for expanding financial inclusion, particularly in countries characterized by low initial levels of inclusion, thereby serving as a mechanism for financial catch-up. Internet diffusion also contributes positively by strengthening the geographic outreach and accessibility of digital financial services. In contrast, fixed-line telephony does not exert a significant influence, reflecting a technological leapfrogging process in which mobile technologies substitute for traditional communication infrastructure. The robustness of these results is confirmed through instrumental variable two-stage least squares (IV-2SLS) estimations. Based on these findings, the study recommends expanding mobile and broadband infrastructure, promoting the integration of digital financial services within traditional financial institutions, strengthening digital literacy, and enhancing cybersecurity frameworks to support broader and more secure financial inclusion across WAEMU countries.
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