The Financialization of Everyday Life: Mobile Money and (In)Formal Activity in a Developing Context

Abstract

This paper contributes to the literature on the financialization of everyday life by studying the relationship between mobile money products and financialized practices in Kenya. We first outline a theoretical approach to studying financialization in developing countries that is consistent with research in developed countries but accommodates the differing motivations and operationalizations of financialized practices in the Global South. In part, this is accomplished by drawing explicit parallels to research on formal financial sector inclusion in developing countries. We extend research by considering how mobile money products may facilitate shifts toward financialized behaviors for individuals in the informal sector. Using nationally representative cross-sectional survey data measuring all financial products and practices used by 13,000 Kenyans, we find that mobile money use is positively related to increased inclusion in the formal financial sector, and formal sector inclusion is also related to the direct measures of financialized behaviors of saving for future needs and investing in productive assets. Additionally, we find that mobile money is also positively related to these financialized behaviors for Kenyans operating entirely in the informal sector. Additionally, we find that women and rural residents are less likely to pair mobile money with formal sector financial products but are no less likely to engage in savings and investment practices. Causal pathways to our correlational results are discussed. Beyond our specific findings, we advocate for an expanded research program on financialization in developing contexts and financialization in the informal sector.