Mobile Money Adoption and Micro-Enterprise Growth in East African Border Towns
Dr. Amanuel Girma · Department of ManagementORCID: 0000-0003-4412-885X
Published 18 September 2026·Citation style: apa·569 views · 82 downloads
Abstract
Mobile money is celebrated as a financial-inclusion success, but its effect on micro-enterprises in border towns — where currency friction and informal trade dominate — is under-studied. Using a two-wave panel of 890 micro-entrepreneurs, we estimate causal effects on revenue growth, savings behaviour and supplier credit.
Introduction
Border-town micro-enterprises operate in distinctive monetary environments: multiple currencies, informal cross-border flows and thin formal-credit markets. Whether mobile money helps or merely adds fee friction in these settings has direct policy relevance for regional integration agendas.
Literature Review
The mobile-money literature documents consumption-smoothing and savings effects at household level, and firm-level studies report working-capital benefits for urban SMEs. Evidence from border economies is thin and mostly cross-sectional; panel designs with plausibly exogenous adoption shocks are absent.
Methodology
We exploit staggered agent-network rollout across 14 border towns between 2023 and 2025 as a quasi-experiment. A two-wave panel of 890 registered micro-entrepreneurs (retail, food service and transport) was surveyed; adoption was instrumented by distance to the nearest agent at baseline. Difference-in-differences with town-level clustered standard errors estimates intent-to-treat effects on monthly revenue, savings stock and supplier-credit access.
Results
Adoption increased average monthly revenue by 17% (p < 0.01), raised the probability of holding formal savings by 23 percentage points, and increased supplier-credit access by 12 points. Fee burdens were regressive for the smallest firms, an effect offset where agents offered merchant-tier pricing. Heterogeneity was strongest for women-led enterprises (+24% revenue).
Discussion
Causal estimates align with the working-capital channel: faster settlement reduces stock-outs. The regressive fee finding cautions against celebrating adoption alone; pricing design determines whether the smallest firms benefit. Border-town results may not generalise to interior markets, and self-selection into follow-up surveys was tested and found limited.
Conclusion
Mobile money causally grows border-town micro-enterprises, with design-sensitive distributional effects. Regulators should pair rollout with merchant-tier pricing for the smallest firms.
Acknowledgments
We thank the 14 town administrations and 890 entrepreneurs who participated across both waves.
Funding & Conflicts
Supported by the East African Employers' Forum research grant (EAEF-2025-11).
Data Availability
Anonymised panel data deposited in the EIU repository; replication code on the journal site.
References
- [1] Girma, A. (2026). Mobile Money Adoption and Micro-Enterprise Growth in East African Border Towns. EIU Journal of Business & Development, 3(2), 40–61.
- [2] Suri, T., & Jack, W. (2024). The long-run poverty and gender impacts of mobile money. Science, 354(6317), 1288–1292.
- [3] Dupas, P., & Robinson, J. (2023). Savings constraints and microenterprise development. AEJ: Applied Economics, 5(1), 163–187.