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Introducing mobile money in rural Mozambique: Evidence from a field experiment

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  • Catia Batista
  • Pedro C. Vicente

Abstract

The limitations of access to finance in Africa, together with the recent boom in cell phone use in that continent, created high expectations regarding the introduction of mobile money in many African countries. The success story of M-PESA in Kenya raised the bar further. We designed and conducted a field experiment to assess the impact of randomized mobile money dissemination in rural Mozambique. For this purpose we benefit from the fact that mobile money was only recently launched in the country, allowing for the identification of a pure control group. This paper reports on the first results of this ongoing project after the first wave of dissemination efforts in rural locations, which included the recruitment and training of mobile money agents, community meetings and theaters, as well as individual rural campaigning. Administrative and behavioral data both show clear adherence to the services in the treatment group. Financial literacy and trust outcomes are also positively affected by the treatment. We present behavioral evidence that the marginal willingness to remit was increased by the availability of mobile money. Finally, we observe a tendency for mobile money to substitute traditional alternatives for both savings and remittances.

Suggested Citation

  • Catia Batista & Pedro C. Vicente, 2013. "Introducing mobile money in rural Mozambique: Evidence from a field experiment," NOVAFRICA Working Paper Series wp1301, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    • Handle: RePEc:unl:novafr:wp1301
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    References listed on IDEAS

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    1. Batista, Catia & Lacuesta, Aitor & Vicente, Pedro C., 2012. "Testing the ‘brain gain’ hypothesis: Micro evidence from Cape Verde," Journal of Development Economics, Elsevier, vol. 97(1), pages 32-45.
    2. Dean Yang, 2011. "Migrant Remittances," Journal of Economic Perspectives, American Economic Association, vol. 25(3), pages 129-152, Summer.
    3. Dean Yang, 2008. "International Migration, Remittances and Household Investment: Evidence from Philippine Migrants’ Exchange Rate Shocks," Economic Journal, Royal Economic Society, vol. 118(528), pages 591-630, April.
    4. Duflo, Esther & Glennerster, Rachel & Kremer, Michael, 2008. "Using Randomization in Development Economics Research: A Toolkit," Handbook of Development Economics, in: T. Paul Schultz & John A. Strauss (ed.), Handbook of Development Economics, edition 1, volume 4, chapter 61, pages 3895-3962, Elsevier.
    5. Nava Ashraf & Dean Karlan & Wesley Yin, 2006. "Tying Odysseus to the Mast: Evidence From a Commitment Savings Product in the Philippines," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(2), pages 635-672.
    6. Robert Jensen, 2007. "The Digital Provide: Information (Technology), Market Performance, and Welfare in the South Indian Fisheries Sector," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 879-924.
    7. Ignacio Mas & Olga Morawczynski, 2009. "Designing Mobile Money Services Lessons from M-PESA," Innovations: Technology, Governance, Globalization, MIT Press, vol. 4(2), pages 77-91, April.
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    Cited by:

    1. Kennedy Waweru, 2017. "Mobile Money, the Symbolism of Physical Money and Emerging Dynamics in Social Relationships among Low-Income Earners in Kenya," International Journal of Business and Management, Canadian Center of Science and Education, vol. 12(4), pages 178-178, March.
    2. Olukorede Abiona & Martin Foureaux Koppensteiner, 2022. "Financial Inclusion, Shocks, and Poverty: Evidence from the Expansion of Mobile Money in Tanzania," Journal of Human Resources, University of Wisconsin Press, vol. 57(2), pages 435-464.
    3. Grzybowski, Lukasz & Lindlacher, Valentin & Mothobi, Onkokame, 2023. "Mobile money and financial inclusion in Sub-Saharan Africa," Information Economics and Policy, Elsevier, vol. 65(C).
    4. Lashitew, Addisu A. & van Tulder, Rob & Liasse, Yann, 2019. "Mobile phones for financial inclusion: What explains the diffusion of mobile money innovations?," Research Policy, Elsevier, vol. 48(5), pages 1201-1215.
    5. Serge Ky & Clovis Rugemintwari & Alain Sauviat, 2018. "Does Mobile Money Affect Saving Behaviour? Evidence from a Developing Country," Journal of African Economies, Centre for the Study of African Economies, vol. 27(3), pages 285-320.
    6. Catia Batista & Gaia Narciso, 2018. "Migrant Remittances and Information Flows: Evidence from a Field Experiment," The World Bank Economic Review, World Bank, vol. 32(1), pages 203-219.
    7. Woodruff, Christopher & De Mel, Suresh & Sheth, Ketki & McIntosh, Craig, 2018. "Can Mobile-Linked Bank Accounts Bolster Savings? Evidence from a Randomized Controlled Trial in Sri Lanka," CEPR Discussion Papers 13378, C.E.P.R. Discussion Papers.
    8. Manuela NGABA, 2021. "How does mobile money affect the use of informal remittance channels in Sub-Saharan Africa?," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 53, pages 123-146.
    9. repec:ags:aaea22:335719 is not listed on IDEAS
    10. Asif Islam & Silvia Muzi & Jorge Luis Rodriguez Meza, 2018. "Does mobile money use increase firms’ investment? Evidence from Enterprise Surveys in Kenya, Uganda, and Tanzania," Small Business Economics, Springer, vol. 51(3), pages 687-708, October.
    11. Cátia Batista & Marcel Fafchamps & Pedro C Vicente, 2022. "Keep It Simple: A Field Experiment on Information Sharing among Strangers [Changing Saving and Investment Behavior: The Impact of Financial Literacy Training and Reminders on Micro-Businesses]," The World Bank Economic Review, World Bank, vol. 36(4), pages 857-888.
    12. World Bank Group, 2016. "Enhancing Financial Capability and Inclusion in Azerbaijan," World Bank Publications - Reports 24955, The World Bank Group.
    13. Grzybowski Lukasz & Lindlacher Valentin & Mothobi Onkokame, 2023. "Interoperability Between Mobile Money Agents and Choice of Network Operators: The Case of Tanzania," Review of Network Economics, De Gruyter, vol. 22(1), pages 27-52, June.
    14. Steinert, Janina I. & Zenker, Juliane & Filipiak, Ute & Movsisyan, Ani & Cluver, Lucie D. & Shenderovich, Yulia, 2018. "Do saving promotion interventions increase household savings, consumption, and investments in Sub-Saharan Africa? A systematic review and meta-analysis," World Development, Elsevier, vol. 104(C), pages 238-256.
    15. Martina Metzger & Jennifer Pédussel Wu, 2020. "Moving Minds and Money: The Political Economy of Migrant Transfers," ICDD Working Papers 33, University of Kassel, Fachbereich Gesellschaftswissenschaften (Social Sciences), Internatioanl Center for Development and Decent Work (ICDD).
    16. Karthik Balasubramanian & David F. Drake, 2015. "Service Quality, Inventory and Competition: An Empirical Analysis of Mobile Money Agents in Africa," Harvard Business School Working Papers 15-059, Harvard Business School, revised Oct 2015.
    17. Emmanuel Kwablah Apiors & Aya Suzuki, 2018. "Mobile Money, Individuals’ Payments, Remittances, and Investments: Evidence from the Ashanti Region, Ghana," Sustainability, MDPI, vol. 10(5), pages 1-26, May.
    18. Cátia Batista & Marcel Fafchamps & Pedro C. Vicente, 2018. "Keep It Simple: A Field Experiment on Information Sharing in Social Networks," NBER Working Papers 24908, National Bureau of Economic Research, Inc.
    19. Leora Klapper & Dorothe Singer, 2017. "The Opportunities and Challenges of Digitizing Government-to-Person Payments," The World Bank Research Observer, World Bank, vol. 32(2), pages 211-226.

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    More about this item

    Keywords

    Mobile money; remittances; savings; Mozambique;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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