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Mobile Money and Inter-Household Financial Flows: Evidence from Madagascar

Author

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  • Sabrine Bair
  • Ahmed Tritah

Abstract

Mobile money is expanding rapidly across the African continent with the potential to raise financial inclusiveness.?In this paper we investigate the impact of the introduction of mobile money in 2010 on the amount and frequency of funds sent and received among Malagasy households.?We use a selection model combined with an instrumental variable approach to deal with the selective participation into the transfer market and the endogeneity of mobile money adoption.?We show that access to mobile money has triggered more financial transactions between households at both the extensive (number of potential users) and intensive margin (level of funds).?Our results suggest that transactions costs are important and act as barriers to entry for the poor.?The advent of new communication technologies has the potential to alleviate these barriers and bring into secure financial transactions a large segment of a previously excluded population. JEL Codes: D14, G21, O16.

Suggested Citation

  • Sabrine Bair & Ahmed Tritah, 2019. "Mobile Money and Inter-Household Financial Flows: Evidence from Madagascar," Revue économique, Presses de Sciences-Po, vol. 70(5), pages 847-871.
    • Handle: RePEc:cai:recosp:reco_705_0847
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    Cited by:

    1. 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.

    More about this item

    Keywords

    mobile money; remittances; transaction costs; Africa; financial inclusiveness; Madagascar;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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