This research examines how the complementarity between technology and legal reforms can reduce financial frictions and promote investments in low and middle-income countries. Specifically, it investigates whether the introduction of 3G mobile internet in Rwanda affects borrowers' access to formal banking, highlighting the role of collateral. The main finding is that mobile internet facilitates a shift from microfinance institutions to commercial banks, improving access to bank loans without increasing default rates. By improving access to collateral systems, the spread of mobile internet resulted in a significant increase in the acquisition of land titles, which stimulated investments in the construction sector.
STEG Project Policy Brief
• Research Theme 1: Firms, Frictions and Spillovers, and Industrial Policy,
Research Theme 5: The Role of the Public Sector
Financial Technologies and Credit Markets in Africa
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