IMF Working Papers

Mobile Internet, Collateral, and Banking

By Angelo D’Andrea, Patrick Hitayezu, Kangni R Kpodar, Nicola Limodio, Andrea F Presbitero

March 29, 2024

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Angelo D’Andrea, Patrick Hitayezu, Kangni R Kpodar, Nicola Limodio, and Andrea F Presbitero. Mobile Internet, Collateral, and Banking, (USA: International Monetary Fund, 2024) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

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.

Subject: Bank credit, Commercial banks, Financial inclusion, Financial institutions, Financial markets, Loans, Mobile internet, Money, Technology

Keywords: Africa, Bank credit, Banks, Collateral's availability, Commercial banks, Credit, Credit market, Financial inclusion, High-speed Internet, Internet penetration, Loan characteristic, Loan term, Loans, Mobile, Mobile internet, Technological Change

Publication Details

  • Pages:

    69

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2024/070

  • Stock No:

    WPIEA2024070

  • ISBN:

    9798400270734

  • ISSN:

    1018-5941

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