NEWS
2025.07.15
【Report】 The 80th AJI Frontier Seminar was held! Dr. Usman Alhassan presented “Mobile Money Adoption, Financial Literacy, and Informal Enterprises Performance.”
The 80th AJI Frontier Seminar was held online on Tuesday, June 10, 2025. Dr. Usman Alhassan, a researcher at Ritsumeikan Asia-Japan Ritsumeikan University, Japan, gave a presentation on “Mobile Money Adoption, Financial Literacy, and Informal Enterprises Performance.”
Dr. Usman began by explaining that informal firms, which employ over 80% of the workforce in some Asian countries, are necessary but underwhelming contributors to development, and their contribution to GDP has been declining due to limited growth, credit constraints, and financial exclusion. He asked two questions: Does mobile money improve the performance of informal enterprises in Asia? Does financial literacy strengthen or weaken the effect of mobile phone-enabled financial services (MM)?
Dr. Usman utilized data from the recent Informal Sector Enterprises Survey (ISES) conducted by the World Bank and employed a novel area-based adaptive cluster sampling technique to capture the population of informal businesses clustered in specific locations within cities or urban areas. He estimated the average treatment effect on the treated (ATET), which shows the actual effect of using mobile money on performance using doubly robust estimators: entropy balancing, propensity score matching, and inverse probability weighted regression adjustment (IPWRA).
Consistent with the existing literature, he found that mobile money enhances the performance of informal enterprises, improves payment systems for customers and suppliers, and facilitates better operational cost management. Dr. Usman concluded that the operational cost function plays a vital role in Asia, and financial literacy plays a key role in lessening the potentially harmful effects of MM. He warned that ignoring the role of financial literacy overstates the effect of mobile money. Meanwhile, financially literate MM firms experience increased profit and labor productivity. Thus, MM has the potential to improve financial inclusion for informal enterprises, as it represents a conduit for formal financial services that could foster sustenance.
In the Q&A session following Dr. Usman’s presentation, questions were raised regarding his Data and Analysis methods, the rapid adoption of MM in Asian countries, and how the issue of financial literacy is being addressed. Dr. Usman pointed out that studies on informal enterprises have so far overlooked the important role of financial literacy, which can mitigate the adverse effects of fintech and MM on household welfare.
Dr. Usman Alhassan delivering his presentation
Please visit the following link for previous AJI Frontier Seminars:
https://en.ritsumei.ac.jp/research/aji/young_researcher/seminar/archive/