Digital financial services adoption: a retrospective time-to-event analysis approach

Abstract Expanding digital financial services (DFS) such as mobile money has become a key policy intervention for many developing and emerging countries as they seek to fast-track financial and economic inclusion. To date, adults in these markets have had more mobile money accounts than traditional bank accounts. Numerous studies have used binary approaches to understand the factors explaining DFS adoption. However, there is a dearth of studies, that investigate the time to DFS adoption and factors that predict time to adoption. To close this gap, this study used a time-to-event analysis approach to estimate the time to DFS adoption and investigate the factors that explain the variation in time to adoption. Using a sample of 1800 survey respondents from Zimbabwe, the study found that it took 4.4 and 8.5 years, respectively, for urban and rural residents to adopt DFS. Overall, the findings show that individuals who are significantly more likely to adopt DFS faster are those residing in urban areas, near mobile money agents, banked, with high levels of education and financial literacy, middle-aged, belonging to social groups, and self-employed. In addition, an expansionary macroeconomic environment was associated with greater DFS adoption intensities. The findings also show that gender and income level do not predict the time to DFS adoption in the studied market. This study provides policy and practitioner recommendations for possible actions to accelerate the adoption of DFS.