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A pathway to financial inclusion: mobile money and individual Savings in Uganda

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  • Mayanja, Musa
  • Adong, Annet

Abstract

This study provides a micro perspective on the impact that mobile money services have on an individual’s saving behavior using 2013 Uganda FinScope data. The results show that although saving through mobile phones is not a common practice in Uganda, being a registered mobile money user increases the likelihood of saving with mobile money. Using mobile money to save is more prevalent in urban areas and in the central region than in other regions. This can be explained by several factors. First, rural dwellers on average tend to have lower incomes and thus have a lower propensity to save compared with their urban counterparts. Second, poor infrastructure in rural areas in terms of the lack of electricity and poor telecommunication network coverage may limit the use of mobile phones and consequently the use of mobile money as a saving mechanism. Overall, the use of mobile money as a saving mechanism is still very low, which could be partly explained by legal limitations that do not incorporate mobile finance services into mobile money. The absence of interest payments on mobile money savings may also act as a disincentive to save through this mechanism. Given the emerging mobile banking services, there is need to create greater awareness and to enhance synergies between telecoms companies and commercial banks.

Suggested Citation

  • Mayanja, Musa & Adong, Annet, 2016. "A pathway to financial inclusion: mobile money and individual Savings in Uganda," Research Series 242365, Economic Policy Research Centre (EPRC).
  • Handle: RePEc:ags:eprcrs:242365
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    File URL: http://ageconsearch.umn.edu/record/242365/files/127%20A%20pathway%20to%20financial%20inclusion%20-%20Mobile%20money%20and%20individual%20savings%20in%20Uganda.pdf
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    References listed on IDEAS

    as
    1. Isaac Mbiti & David N. Weil, 2015. "Mobile Banking: The Impact of M-Pesa in Kenya," NBER Chapters,in: African Successes, Volume III: Modernization and Development, pages 247-293 National Bureau of Economic Research, Inc.
    2. Franklin Allen & Elena Carletti & Robert Cull & Jun ‘QJ’ Qian & Lemma Senbet & Patricio Valenzuela, 2014. "The African Financial Development and Financial Inclusion Gaps," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 23(5), pages 614-642.
    3. William Jack & Tavneet Suri, 2011. "Mobile Money: The Economics of M-PESA," NBER Working Papers 16721, National Bureau of Economic Research, Inc.
    4. Demombynes, Gabriel & Thegeya, Aaron, 2012. "Kenya's mobile revolution and the promise of mobile savings," Policy Research Working Paper Series 5988, The World Bank.
    5. Paul J. Gertler & Sebastian Martinez & Patrick Premand & Laura B. Rawlings & Christel M. J. Vermeersch, 2011. "Impact Evaluation in Practice, First Edition
      [La evaluación de impacto en la práctica]
      ," World Bank Publications, The World Bank, number 2550.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Community/Rural/Urban Development; Financial Economics; Labor and Human Capital;

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