1973, the first “mobile” phone was presented by Motorola. Since then, mobile
technology has made a rapid development in terms of both hardware and software.
This development opened up new possibilities for mobile phone users to engage
in. Recently, a new development is emerging which is called Mobile Money (MM).
This is a payment system that allows users to send and receive money without
the intervention of a bank. In this system, the SIM card with its corresponding
phone number acts as a sort of account number (WorldRemit
This development is useful, most
notably in developing countries, to improve the overall level of financial
inclusion. Financial inclusion describes the availability of financial services
to the public, such as insurance and savings. Traditionally, the banking system
was the only way to open an account. However, in 2014, only 54% of adults in
developing countries had access to a bank account on average (Demirguc-Kunt,
Klapper, Singer, & Van Oudheusden, 2015). Here, MM provides an interesting
alternative as a lot of people do have access to a mobile phone and that number
is increasing (Poushter, 2016).
For this particular
research, the scope will be narrowed down to a specific developing country,
Uganda, in order to provide a more detailed examination of the adoption process
of MM. In Uganda, the number of people who have access to MM vastly exceeds the
number of people who hold a bank account. MM can be used to facilitate access
to insurance, credit, and savings even
for poor households in remote areas thus improving financial inclusion (Murendo, Wollni, De Brauw & Mugabi, 2017).
For policymakers, it is therefore of
interest to promote a monetary infrastructure in the form of MM. However,
according to World Bank (2015), the
adoption of mobile money in Uganda is not as widespread as is desirable. About
35% of the adult population in Uganda is using MM, which implies that about two-thirds of the population do not use it. The spread of this innovation is
thus inhibited in some way. The remainder of this paper will examine the
diffusion process and its apparent inhibition by making use of social network
effects and its related communication channels.