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Learning to walk before you run : Financial Behavior and mobile banking in Madagascar

  • Venet, Baptiste
  • Arestoff, Florence
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    In Madagascar, Orange introduced its mobile banking services in September 2010. Mobile-banking (m-banking) is a system that allows users to conduct a number of financial transactions through a mobile phone. The existing body of literature suggests that the use of m-banking services may have a positive impact on individual savings, affect money transfer behavior and/or encourage financial inclusion. In 2012, we conducted a survey of 598 randomly selected Orange clients in Antananarivo. We use the matching methodology to assess the impacts of m-banking on clients' financial behavior. The results show that the use of m-banking services increases the number of national remittances sent and received. It is in line with the conclusions of the existing literature devoted to M-Pesa in Kenya. Yet we find that using of m-banking services has no significant impact on the sums saved by users or the sums of remittances sent and received, which appears to contradict the users' perceptions. This result may, however, be explained by a learning-by-doing process: users need to first learn to trust the e-money system before making any significant changes to their financial behavior.

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    File URL: http://basepub.dauphine.fr/xmlui/bitstream/123456789/11979/1/DT%202013-09%20Arestoff%20-%20Venet.pdf
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    Paper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/11979.

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    Date of creation: Sep 2013
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    Publication status: Published in DIAL Document de travail, 2013
    Handle: RePEc:dau:papers:123456789/11979
    Contact details of provider: Web page: http://www.dauphine.fr/en/welcome.html

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    1. Isaac Mbiti & David N. Weil, 2014. "Mobile Banking: The Impact of M-Pesa in Kenya," NBER Chapters, in: African Successes: Modernization and Development National Bureau of Economic Research, Inc.
    2. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
    3. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 605-54, October.
    4. Olga Morawczynski & Mark Pickens, 2009. "Poor People Using Mobile Financial Services : Observations on Customer Usage and Impact from M-PESA," World Bank Other Operational Studies 9492, The World Bank.
    5. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20035, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
    6. Demombynes, Gabriel & Thegeya, Aaron, 2012. "Kenya's mobile revolution and the promise of mobile savings," Policy Research Working Paper Series 5988, The World Bank.
    7. Alberto Abadie & Guido W. Imbens, 2008. "On the Failure of the Bootstrap for Matching Estimators," Econometrica, Econometric Society, vol. 76(6), pages 1537-1557, November.
    8. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
    9. Claire Bonnard, 2011. "Les incitations à l'innovation dans le secteur privé," Post-Print halshs-00599700, HAL.
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