MOBILE MONEY, FINANCIAL INCLUSION AND ECONOMIC DEVELOPMENT IN KENYA

Mobile money has become a pivotal tool in advancing financial inclusion, particularly in regions where traditional banking infrastructure is sparse or entirely absent. This digital financial service allows users to conduct financial transactions via mobile devices, enabling access to financial services for those who are unbanked or under banked to finance the much need economic activities. The integration of mobile technology with financial services has catalyzed a profound shift in how financial inclusion is approached and achieved and what effect it has on economic development. The study had the objectives of determining the effect of mobile money on economic development in Kenya, establishing the effect of financial inclusion on economic development in Kenya, establishing the relationship between mobile money and financial inclusion in Kenya and investigating the effect of mobile money and financial inclusion on economic development in Kenya. Data was collected from the Central Bank of Kenya financial reports and from Economic Surveys published by the National Bureau of Statistics for the period 2017 to 2022. Descriptive statistics which estimated the means, the standard deviations, the skewness and kurtosis were undertaken. Correlation analysis was done to establish the relationships between the study variables. Regressions focusing on each of the four objectives were estimated. The regressions revealed that mobile money has a significant positive effect on economic development and financial inclusion has a significant positive effect on economic development. Both mobile money and financial inclusion positively and significantly influence each other. When anlysed jointly the revelation was that both mobile money and financial inclusion jointly significantly influence economic development. Mobile money and financial inclusion are important to the economy and when formulating policies the economic managers cannot overlook incorporating policies for promoting mobile money and totally embracing financial inclusion to spur economic development. Transparency and accountability are also essential for ensuring that the members of the population have the requisite financial mechanisms which instils confidence of the financial market so as to enable access to finances for funding the much needed economic activities.