Does Mobile Money Adoption and Credit Access Improve Enterprise Innovation and Performance in Sierra Leone?

ABSTRACT

This study sought to unpack the impact of mobile money adoption and credit constraints on product innovation and performance of Micro, Small, and Medium‐scale Enterprises in Sierra Leone. We used the most recent Sierra Leone Enterprise survey data conducted by the World Bank to monitor enterprises. To achieve the objectives of the study, we used Ordinary Least Squares and nonexperimental techniques (instrumental variable techniques). This allowed us to account for potential endogeneity problems that may bias parameter estimates if not accounted for. Our findings show that mobile money use and credit access significantly enhanced firms' ability to innovate, which then improved their performance. We did not find any statistically significant gender‐related variation in the relationship. Our findings support current policy efforts to revamp financial inclusion in Sierra Leone and highlight the need to tailor services to fully reap the potential gains.