The role of betting on digital credit repayment, coping mechanisms and welfare outcomes: Evidence from Kenya

Digital financial services and more importantly, mobile money, have become an important financial innovation to advance financial inclusion in developing and emerging economies. While digital financial services have improved the lives of many Kenyans, to the growing betting segment of the Kenyan pop...

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Bibliographic Details
Published inInternational journal of financial studies Vol. 9; no. 1; pp. 1 - 12
Main Authors Chamboko, Richard, Guvuriro, Sevias
Format Journal Article
LanguageEnglish
Published Basel MDPI 01.03.2021
MDPI AG
Subjects
Bank technology
Behavior
betting
Cellular telephones
Central banks
Consumption
Coping
coping strategies
Cost control
digital credit
digital financial services
Emerging markets
financial distress
Financial inclusion
Financial services
Loans
Online gambling
Population
Smartphones
Sports betting
welfare outcomes
Kenya
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Summary:Digital financial services and more importantly, mobile money, have become an important financial innovation to advance financial inclusion in developing and emerging economies. While digital financial services have improved the lives of many Kenyans, to the growing betting segment of the Kenyan population, these innovations have also brought great convenience to betting. The innovations have allowed easy access to digital credit which can be used for betting. Despite betting or gambling being a widely studied area, particularly in developed countries, little is known about its interaction with financial innovations such as digital financial services in developing and emerging economies. Using data from a 2017 digital credit survey in Kenya, this study investigates if bettors are more likely than non-bettors to be financially distressed or engage in welfare-undermining coping strategies and potentially experience inferior welfare outcomes. The study uses a representative sample of 1040 digital borrowers, of which 304 were digital bettors. Using multivariate logistic regressions, the study found that, after controlling for socio-economic and demographic factors, bettors are significantly more likely than non-bettors to be financially distressed, engage in welfare undermining coping strategies, and have inferior welfare outcomes.
ISSN:2227-7072
2227-7072
DOI:10.3390/ijfs9010010