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

MUNYEGERA, Ggombe Kasim  ,  MATSUMOTO, Tomoya

15-202015-12 , GRIPS Policy Research Center
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.
JEL Classification Codes: O16, O17, O33, I131

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