Abstract
While many studies that are focused on mobile money concern the effects of mobile money on consumption and informal risk-sharing, little evidence is provided on how mobile money influences payments and microbusiness investment for low-income people. We estimate the effects of access to mobile money on individuals’ payments and income-generating activities by using data from the Ashanti Region of Ghana. Based on propensity-score matching and propensity-score weighted regression, we find that participation in mobile money is not dependent on individuals’ financial status. We also observe that mobile-money users are likely to send and receive larger volumes of payments and remittances. We further find that mobile-money users are more likely to save higher amounts, invest more in education, microbusinesses, land, and buildings, and also consume more relative to non-users.
Highlights
Financial inclusion could be defined as the full range of services, to specific quality features of delivery, inclusiveness, and choice
Using primary data obtained from 557 study participants (388 users and 169 non-users) largely from the informal sector across urban, peri-urban, and rural communities in Ghana, we examine whether the socio-economic characteristics, payments, remittances, savings, and micro-investment activities of mobile-money users significantly differ from those of non-mobile money users
The results indicate that years of formal education, household size, non-household dependents, and number of months since an individual heard about mobile money are significant variables that positively influence the probability of using mobile money
Summary
Financial inclusion could be defined as the full range of services (payments, savings, credit, and insurance), to specific quality features of delivery (for example, stability and affordability), inclusiveness (with special focus on the poor), and choice (offer of service by a range of institutions). Mobile money as a financial inclusion tool is suggested to have the potential to provide access to financial services to two billion unbanked adults [1], as well as about 200 million formal and informal micro, small, and medium-size enterprises in developing economies that lack access to affordable financial services [2,3]. Lack of access to financial services contributes to creating poverty traps and forces people to remain poor over generations [5,6]. Including the poor through mobile money is likely to increase volumes of domestic payments and spur participation in a formal economy, with the benefits of smoothing incomes, protecting against vulnerabilities, facilitating day-to-day living, and pushing toward sustainable development goals [2,3]. Evidence of its effect on individuals’ domestic payments and sustainable microbusiness investment is lacking
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