| Abstract: |
Financial services in low income countries are often not well developed, thus,
individuals rely heavily on informal means of financial services to send,
receive and save money, with a large number of the population unbanked. Mobile
money, a type of financial innovation, enables individuals to transfer,
deposit and save money using cell phone technology. It not only has the
potential to improve access to financial services but could also have an
effect on household consumer behaviour and improve individuals' livelihoods.
This paper investigates the difference in consumption patterns between mobile
money users and non-users in Uganda, one of the countries that have seen
significant increases in mobile money usage, since its introduction in 2009.
It is based on the Financial Inclusion Tracker Surveys (FITS) household level
data that was conducted in 2012. Using ordinary least squares and seemingly
unrelated regression estimation techniques, the results suggests that mobile
money users are less likely to spend on food, a necessity, and more likely to
spend on luxury goods, than non-users. In addition, mobile money users are
more likely to receive more remittances and, as a result, they are able to
spend more efficiently on particular commodities than non-users. This suggests
that mobile money could indeed potentially improve individuals' livelihoods. |