From Financial Inclusion to Investment Participation: Does Mobile Money Bridge the Capital Market Access Gap in Nigeria and Kenya?

While mobile money has brought about profound changes in the realm of financial inclusion in Sub-Saharan Africa, its contribution to capital market participation is rather insignificant. The present paper explores the capacity of mobile money in narrowing the investment gap by promoting access to formal investment tools, using a comparative case approach in comparing the situation in Nigeria and Kenya. Using secondary information obtained from global financial organizations, academic literature, and official sources, the research utilizes an approach based on descriptive comparison and thematic policy assessment. Research findings reveal that despite considerable improvements in terms of increasing access, usage, and liquidity due to the adoption of mobile money, capital market participation has remained relatively unchanged proportionally. Kenya shows a relatively closer association between mobile money adoption and capital market participation due to its advanced digital finance infrastructure and better integration of mobile money with finance services.

In Nigeria, mobile money adoption is faced with obstacles such as regulatory fragmentation, inadequate coordination of institutions, and product integration. Common barriers to the use of mobile money and its linkages to investment markets include low levels of financial literacy, lack of trust, financial constraints, and weak policy alignment. Fintech tools promote access to investment products but serve as intermediary tools. Overall, this research supports previous scholarly studies on mobile money, digital finance, and financial inclusion, taking it further by focusing on the issue of investment.