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The impact of mobile money on long-term poverty: evidence from Bangladesh

Author

Listed:
  • A. T. M. Hasibul Islam

    (University of Victoria)

  • Syed Abul Basher

    (East West University)

  • A. K. Enamul Haque

    (East West University)

Abstract

Mobile money has become a lifeline for millions of poor people who have limited access to a formal banking system. It encompasses a wide range of benefits such as women’s empowerment, risk sharing, improved labor market outcomes and reductions in poverty. In this paper, we ask whether mobile money can help lift people out of poverty. Previous studies have addressed this question by using microanalyses of field experiments or longitudinal data on rural households, whereas we use district-level data to reevaluate the mobile money–poverty nexus. In particular, we study the impact of mobile money on district-level poverty in Bangladesh over the period 2010–2016. Our study finds that every 1 billion Taka (approximately US$ 11.76 million) increase in mobile money transactions via the bKash system in 2015 is associated with 0.71% point reduction in the poverty rate in Bangladesh. The marginal impact ranges from 0.12 to 1.15% points across the districts categorized in five groups as per 2010 poverty rates. The findings suggest that mobile money has been successful in fostering various poverty reduction initiatives and that targeted policy prescriptions can be devised to lift up poorer societies that are still outside the purview of mobile financial services. To further increase mobile money use, the government could use its own infrastructure to enhance mobile agent density in the poorest sectors of society.

Suggested Citation

  • A. T. M. Hasibul Islam & Syed Abul Basher & A. K. Enamul Haque, 2022. "The impact of mobile money on long-term poverty: evidence from Bangladesh," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 24(2), pages 436-455, December.
    • Handle: RePEc:spr:jsecdv:v:24:y:2022:i:2:d:10.1007_s40847-022-00194-0
    DOI: 10.1007/s40847-022-00194-0
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    More about this item

    Keywords

    Mobile money; Poverty; bKash;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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