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Learning to walk before you run : Financial Behavior and mobile banking in Madagascar

Author

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  • Florence Arestoff

    (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

  • Baptiste Venet

    (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

Abstract

In Madagascar, Orange introduced its mobile banking services in September 2010. Mobile-banking (m-banking) is a system that allows users to conduct a number of financial transactions through a mobile phone. The existing body of literature suggests that the use of m-banking services may have a positive impact on individual savings, affect money transfer behavior and/or encourage financial inclusion. In 2012, we conducted a survey of 598 randomly selected Orange clients in Antananarivo. We use the matching methodology to assess the impacts of m-banking on clients' financial behavior. The results show that the use of m-banking services increases the number of national remittances sent and received. It is in line with the conclusions of the existing literature devoted to M-Pesa in Kenya. Yet we find that using of m-banking services has no significant impact on the sums saved by users or the sums of remittances sent and received, which appears to contradict the users' perceptions. This result may, however, be explained by a learning-by-doing process: users need to first learn to trust the e-money system before making any significant changes to their financial behavior.

Suggested Citation

  • Florence Arestoff & Baptiste Venet, 2017. "Learning to walk before you run : Financial Behavior and mobile banking in Madagascar," Working Papers hal-01491217, HAL.
    • Handle: RePEc:hal:wpaper:hal-01491217
    Note: View the original document on HAL open archive server: https://hal.science/hal-01491217
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    References listed on IDEAS

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    Keywords

    Mobile banking; Low Income countries; Financial behavior; Matching methodology; Banque mobile; Matching; Comportements financiers; Pays en développement;
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