Does mobile money business influence non-performing loans in the traditional banking sector? Evidence from Ghana

The study analyzes the influence of mobile money business on the growth of non-performing loans in Ghana. Quarterly time-series data from 2000-2018 are used. This secondary data was obtained from the New International Database of Financial Fragility and the Bank of Ghana online database. In the absence of data on quarterly volumes of mobile money transactions or the estimated number of firms, we present a groundbreaking macro-level evidence of how mobile money business operations contribute to the problem of non-performing loans in Ghana. We estimated an autoregressive distributed lag model (ARDL) and find that mobile money business operations positively influence non-performing loans in Ghana. This influence persists in the long-run and raises some policy implications for the banking sector in the country. The paper recommends the need for regulators to develop a policy that creates a well-connected and transparent financial system. Keywords: Mobile Money, Non-Performing Loans, Bankingg, Macroeconomic