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on Microfinance |
| By: | Levison Chiwaula Author-Name: Mirriam Matita Author-Name: Tayamika Kamwanja Author-Name: Lucius Cassim Author-Name: Marcos Agurto |
| Abstract: | Mobile money is increasingly promoted as a strategy to improve financial outcomes and livelihoods in low-income countries. However, its adoption and use among the poor remains low. We exploited a randomized experiment that exposed members of Village Savings and Loan Associations in Malawi to a financial-literacy and mobile-money training program, which was reinforced by weekly text-message reminders. We analyzed the impact of our intervention using survey data collected in the field as well as administrative data from the main telecommunications operators in the area. We found that treated individuals were more likely to have greater knowledge of mobile-money transactions than non-treated ones. They were also more likely to report receiving and saving money using mobile money and were more likely to report that they kept their savings in a formal financial institution. Interestingly, these effects were concentrated in relatively less economically developed areas. We used administrative data to analyze the effects of our intervention on the volume of mobile-money transactions. While the estimated effect had the expected positive sign, it was not statistically significant. We hypothesized that this result may be related to the fact that individuals also relied on local agents to perform mobile-money transactions; such behavior was not captured in administrative data. This is among the first studies to provide rigorous field-based evidence regarding how financial training supported by text-message reminders can influence mobile-money behavior. It is also among the very first to study the effects of such an intervention among members of Village Savings and Loan Associations. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:piercr:2020-10&r=all |
| By: | Guillermo Cruces Author-Name: Hamidou Jawara Author-Name: Adama Touray Author-Name: Fatoumata Singhateh |
| Abstract: | Mobile money has been heralded as a way to foster financial inclusion. While it has become popular in developing countries, most notably in African nations, there are still strong barriers to its adoption and usage. The purpose of this study is to examine the extent to which a lack of information and high prices are limiting factors in the adoption of mobile money. We implemented a simple randomized controlled trial among a group of difficult-to- access potential users: mobile phone users in The Gambia who had opened mobile money wallets but had not made a transaction. We offered meaningful price discounts on withdrawal charges, and made these discounts salient by reminding users about them every month for a period of six months. Our analysis measures different dimensions of mobile money use by drawing from administrative mobile phone company records. We also carried out a post- treatment survey to gauge knowledge about, and attitudes towards, mobile money. Our results indicate that treated individuals were substantially more aware than controls about the uses of mobile wallets and about the meaningful discounts of 15% and 30% offered. However, only a small fraction of treated individuals started using mobile wallets, and the difference was not statistically significant. Perceptions of safety, trust in the platform, and service reliability were not significantly different between treated and controls. However, treated individuals were more likely to perceive the service charges to be expensive. We interpret this as evidence that our population of interest was uninformed about the platform at large. While our treatment increased awareness about its capabilities and operation, potentially fostering its adoption, it also increased awareness of the relatively high fees it involves, which in turn limited usage. Both a lack of information and high prices need to be addressed to foster the adoption and usage of mobile money in developing countries. |
| Keywords: | Mobile wallet, barriers to adoption and usage, developing countries, Gambia |
| JEL: | D13 G21 O16 P34 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:piercr:2020-17&r=all |
| By: | Marcos Agurto; Habiba Djebbari; Sudipta Sarangi Author-Name: Brenda Silupú Author-Name: Carolina Trivelli Author-Name: Javier Torres |
| Abstract: | We experiment with a novel way to boost information acquisition that exploits existing social ties between the promoter of a new financial technology and community members. We offer information and training workshops on a new mobile-money platform in peri-urban and rural areas in Peru. In the treatment group, workshops are led by promoters who are personally known to the invited participants. In the control group, comparable individuals are invited to attend similar workshops, but the workshops are led by agents external to the community. Our findings suggest that lack of information impedes product adoption, which is itself limited by lack of trust in the individual who provides the information. |
| Keywords: | Financial inclusion, social networks, information transmission, trust |
| JEL: | D91 G23 I22 I31 O33 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:piercr:2020-04&r=all |