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   Despite the successful adoption of mobile money in sub-Saharan Africa, there is limited empirical evidence on how mobile money interacts with traditional financial services and the implications of this interaction for firm performance. In this paper, we investigate the effects of mobile money use and access to traditional financial services on labour productivity and test whether mobile money can accentuate the impact of traditional financial services on productivity. Using firm-level data from the World Bank Enterprise Survey across 14 sub-Saharan African countries, we find a significant effect of access to traditional financial services on firm labour productivity but no robust significant direct effect of mobile money use on labour productivity. However, when access to traditional financial services, particularly access to bank capital, is combined with mobile money, there is a productivity improvement. We find similar evidence in the sample of small and medium-sized enterprises. The productivity gain from combining mobile money use with traditional financial service is also found within firms from East Africa and especially firms from other regions where mobile money is emerging, but uptake is relatively low. Overall, the evidence suggests that mobile money can heighten the effects of traditional finance, and we attribute this effect to a reduction in transaction costs. The findings in this paper support that both mobile money and traditional financial services should be promoted at the firm level.

Mobile money, traditional financial services and firm productivity in Africa