The long-run poverty and gender impacts of mobile money

Abstract

Mobile money, a service that allows monetary value to be stored on a mobile phone and sent to other users via text messages, has been adopted by the vast majority of Kenyan households. We estimate that access to the Kenyan mobile money system M-PESA increased per capita consumption levels and lifted 194,000 households, or 2% of Kenyan households, out of poverty. The impacts, which are more pronounced for female-headed households, appear to be driven by changes in financial behavior-in particular, increased financial resilience and saving-and labor market outcomes, such as occupational choice, especially for women, who moved out of agriculture and into business. Mobile money has therefore increased the efficiency of the allocation of consumption over time while allowing a more efficient allocation of labor, resulting in a meaningful reduction of poverty in Kenya.

Mobile Money, Individuals’ Payments, Remittances, and Investments: Evidence from the Ashanti Region, Ghana

“…The higher total savings by users could be explained by participating in mobile money providing access to a convenient saving mechanism [14]. Hence, mobile-money users can save on phones easily and have easy access to the liquidity of savings and more flexible control over their finances.…”

Inventory Management for Mobile Money Agents in the Developing World

“…Mobile money had the effect of significantly widening and enhancing informal insurance networks; family and friends were able to send users more money more efficiently in times of crisis. Suri and Jack (2016) also find evidence that access to M-Pesa, the dominant mobile money system in Kenya, has lifted 194,000 households (2% of all Kenyan households) out of poverty since its inception in 2007. Mbiti (2011) demonstrates that mobile money's introduction as a tool for sending money was so disruptive to the markets for remitting money that, in many cases, remittance prices fell by over 50% over a six-year period.…”

Digital Revolutions in Public Finance

“…Studies so far (Suri and Jack 2016) show that the Digital Financial System driven by M-Pesa has lifted 2 percent of the population out of poverty. The government has slowly moved from cash payments to embrace digitalization, which has made a great difference in revenue administration in Kenya.…”