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ICT for Financial Inclusion: Mobile Money and the Financial Behavior of Rural Households in Uganda

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  • Ggombe Kasim Munyegera

    (National Graduate Institute for Policy Studies)

  • Tomoya Matsumoto

    (National Graduate Institute for Policy Studies)

Abstract

Over 35 percent of the adult use mobile money services in 2014, just five years since its inception in Uganda. Using household survey data covering 820 rural households, we examine the effect of this financial innovation on their financial behavior. We find that adopting mobile money services significantly increases the likelihood of saving, borrowing and receiving remittances due to reduction in transaction cost. The amount of savings, credit and remittances is also significantly higher among user households than non-users. To illustrate the importance of service proximity, we show that reducing the distance to the nearest mobile money agent boosts the frequency of using mobile money services. Our results are robust to specification changes and alternative explanations.

Suggested Citation

  • Ggombe Kasim Munyegera & Tomoya Matsumoto, 2015. "ICT for Financial Inclusion: Mobile Money and the Financial Behavior of Rural Households in Uganda," GRIPS Discussion Papers 15-20, National Graduate Institute for Policy Studies.
    • Handle: RePEc:ngi:dpaper:15-20
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    1. Precious Akampumuza & Hirotaka Matsuda, 2017. "Weather Shocks and Urban Livelihood Strategies: The Gender Dimension of Household Vulnerability in the Kumi District Of Uganda," Journal of Development Studies, Taylor & Francis Journals, vol. 53(6), pages 953-970, June.

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