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Is Mobile Money Changing Rural Africa? Evidence from a Field Experiment

Author

Listed:
  • Catia Batista

    (Nova School of Business and Economics, CReAM, IZA and NOVAFRICA)

  • Pedro C. Vicente

    (Nova School of Business and Economics, BREAD, and NOVAFRICA)

Abstract

Rural areas in sub-Saharan Africa are typically underserved by financial services. We measure the economic impact of introducing mobile money for the first time in rural villages of Mozambique using a randomized control trial. This intervention led to consumption smoothing through increased transfers as a response to both geo-referenced village-level floods and household-level idiosyncratic shocks. Importantly, we find that the availability of mobile money increased migration out of rural areas, where we observe lower agricultural activity and investment. Our work illustrates how financial inclusion can accelerate African urbanization and structural change while improving welfare in rural areas.

Suggested Citation

  • Catia Batista & Pedro C. Vicente, 2021. "Is Mobile Money Changing Rural Africa? Evidence from a Field Experiment," CReAM Discussion Paper Series 2116, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  • Handle: RePEc:crm:wpaper:2116
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    References listed on IDEAS

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    Cited by:

    1. Erika Deserranno & Gianmarco León-Ciliotta & Firman Witoelar, 2021. "When Transparency Fails: Financial Incentives for Local Banking Agents in Indonesia," Working Papers 1233, Barcelona Graduate School of Economics.
    2. Catia Batista & Pedro C. Vicente, 2020. "Adopting Mobile Money: Evidence from an Experiment in Rural Africa," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 594-598, May.
    3. Catia Batista & Julia Seither, 2019. "Aspirations, expectations, identities: behavioral constraints of micro-entrepreneurs," NOVAFRICA Working Paper Series wp1906, Universidade Nova de Lisboa, Faculdade de Economia, NOVAFRICA.

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    More about this item

    Keywords

    mobile money; migration; remittances; technology adoption; insurance; consumption smoothing; investment; savings; Mozambique; Africa.;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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