Payment Technology Adoption and Finance: A Randomized-Controlled-Trial with SMEs

CentER Discussion Paper Series No. 2018-042

60 Pages Posted: 8 Nov 2018

See all articles by Patricio S. Dalton

Patricio S. Dalton

Tilburg University - Center for Economic Research (CentER)

Haki Pamuk

Tilburg University

Ravindra Ramrattan

Tilburg University

Daan van Soest

Tilburg University - CentER & Department of Economics

Burak Uras

Tilburg University - Center for Economic Research (CentER); Tilburg University - Department of Economics

Date Written: October 16, 2018

Abstract

What determines the adoption of electronic-payment instruments? Do these instruments impact business outcomes, in particular access to finance? To shed light on these questions, we conducted a Randomized-Controlled-Trial with Kenyan SMEs. Our experiment released barriers to adopt a novel payment instrument. We uncover that the adoption barriers were binding for a large portion of the firms and that firms' financial transparency interacted with the decision to adopt. After sixteen months, treated businesses were more likely to feel safe and had more loans. The impact on loans was especially pronounced for smaller size establishments, which also experienced a reduction in sales-volatility.

Keywords: Finance; Transparency; Technology Adoption; Lipa Na M-Pesa

JEL Classification: D22, G00, G21, O33

Suggested Citation

Dalton, Patricio S. and Pamuk, Haki and Ramrattan, Ravindra and van Soest, Daan P. and Uras, Burak R., Payment Technology Adoption and Finance: A Randomized-Controlled-Trial with SMEs (October 16, 2018). CentER Discussion Paper Series No. 2018-042. Available at SSRN: https://ssrn.com/abstract=3267254 or http://dx.doi.org/10.2139/ssrn.3267254

Patricio S. Dalton (Contact Author)

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Haki Pamuk

Tilburg University ( email )

Ravindra Ramrattan

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC 5000 LE
Netherlands

Daan P. Van Soest

Tilburg University - CentER & Department of Economics ( email )

P.O. Box 90153
5000 LE Tilburg
Netherlands
+31 13 466 2072 (Phone)

Burak R. Uras

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Tilburg University - Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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