Mobile Internet, Collateral, and Banking

69 Pages Posted: 4 Apr 2024

See all articles by Angelo D'Andrea

Angelo D'Andrea

Bank of Italy - Research Department

Patrick Hitayezu

National Bank of Rwanda

Kangni Kpodar

International Monetary Fund (IMF)

Nicola Limodio

Bocconi University; Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research; Bocconi University - Baffi Carefin Centre; Centre for Economic Policy Research (CEPR)

Andrea Presbitero

International Monetary Fund (IMF); Centre for Economic Policy Research (CEPR)

Abstract

Combining administrative data on credit, internet penetration and a land reform in Rwanda, this paper shows that the complementarity between technology and law can overcome financial frictions. Leveraging quasi-experimental variation in 3G availability from lightning strikes and incidental coverage, we show that mobile connectivity steers borrowers from microfinance to commercial banks and improves loan terms. These effects are partly due to the role of 3G internet in facilitating the acquisition of land titles from the reform, used as a collateral for bank loans and mortgages. We quantify that the collateral's availability mediates 35% of the overall effect of mobile internet on credit and 80% for collateralized loans.

Keywords: Banks, Credit, High-speed Internet, Mobile, Technological Change

JEL Classification: G21, G23, O33

Suggested Citation

D'Andrea, Angelo and Hitayezu, Patrick and Kpodar, Kangni and Limodio, Nicola and Presbitero, Andrea, Mobile Internet, Collateral, and Banking. IMF Working Paper No. 2024/070, Available at SSRN: https://ssrn.com/abstract=4782818 or http://dx.doi.org/10.5089/9798400271946.001

Angelo D'Andrea (Contact Author)

Bank of Italy - Research Department ( email )

Via Nazionale 91
00184 Roma
Italy

Patrick Hitayezu

National Bank of Rwanda ( email )

Rwanda

Kangni Kpodar

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Nicola Limodio

Bocconi University ( email )

Via Roentgen 1
Milano, MI 20136
Italy

HOME PAGE: http://www.nicolalimodio.com

Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research ( email )

Via Roentgen 1
Milan, 20136
Italy

Bocconi University - Baffi Carefin Centre ( email )

Via Roentgen 1
Milan
Italy

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Andrea Presbitero

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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