Payment Technology Adoption and Finance: A Randomized-Controlled-Trial with SMEs
CentER Discussion Paper Series No. 2018-042
60 Pages Posted: 8 Nov 2018
Date Written: October 16, 2018
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
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