What are the Enablers and Impacts of Digital Financial Services? An Updated Evidence Gap Map
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Research in Brief 125
Digital financial services (DFS), including mobile money services, have expanded rapidly over the last decade, particularly in sub-Saharan Africa. This expansion has been accompanied by claims that DFS can alleviate poverty, empower women, help businesses grow, and improve macroeconomic outcomes and government effectiveness. As DFS have become more widespread, governments have increasingly targeted DFS revenues and profits. This has sparked political controversy in some countries and critics have raised concerns that such taxes may undermine financial inclusion and prevent benefits for poor people arising from financial inclusion. Given the rapid expansion of DFS and the hopes placed in them, as well as the proliferation of taxes on DFS, an overview of the evidence on what the enablers and barriers of DFS are, and what the impacts of DFS are, can help policymakers and academic researchers make better-informed assessments about the implications of DFS and decisions about whether and how to tax them. The authors undertook an evidence overview in May 2021 in the form of an Evidence Gap Map (EGM), adopting the EGM approach developed by 3ie, and we performed an updated search for new evidence in November 2022. This brief reports on the findings from our EGM after the updated search.
Philip Mader is a Research Fellow at the Institute of Development Studies and works with the ICTD's DIGITAX programme. His research areas include political economy, finance and development, youth employment, financialisation, financial inclusion and, more broadly, market-oriented interventions in development.
Keir Macdonald is a Research Officer at the Institute of Development Studies in the Business, Markets and State research cluster. His focus is on researching financial inclusion, development finance, and impact investment.
Mary Abounabhan is a Research Officer for the DIGITAX programme. Her research focuses on the the appropriateness and effectiveness of digital financial services taxes and their development impacts. She has completed her Masters of Globalisation, Business, and Development at the Institute of Development Studies, focusing her research on the Moral Economy of social media taxation in Lebanon.
Celeste Scarpini is a Research Officer at the ICTD, and a PhD student at the Department of Economics, University of Sussex. Her main research interests relate to tax administration in sub-Saharan Africa, from technology adoption to data management and revenue collection strategies.
Citation: Mader, P. et al. (2024) What are the Enablers and Impacts of Digital Financial Services? An Updated Evidence Gap Map, ICTD Research in Brief 125, Brighton: Institute of Development
Studies, DOI: 10.19088/ICTD.2024.065
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