Working Paper: NBER ID: w16721
Authors: William Jack; Tavneet Suri
Abstract: Mobile money is a tool that allows individuals to make financial transactions using cell phone technology. In this paper, we report initial results of two rounds of a large survey of households in Kenya, the country that has seen perhaps the most rapid and widespread growth of a mobile money product - known locally as M‐PESA - in the developing world. We first summarize the mechanics of M-PESA, and review its potential economic impacts. We then document the sequencing of adoption across households according to income and wealth, location, gender, and other socio‐economic characteristics, as well as the purposes for which the technology is used, including saving, sending and receiving remittances, and direct purchases of goods and services. In addition, we report findings from a survey of M‐PESA agents, who provide cash‐in and cash‐out services, and highlight the inventory management problems they face.
Keywords: Mobile Money; MPesa; Financial Inclusion; Kenya; Economic Impact
JEL Codes: O16; O33; O55
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Ease of making payments (E42) | Higher likelihood of completing transactions (L14) |
| MPesa usage (E29) | Enhanced savings allocation (D14) |
| MPesa usage (E29) | Labor mobility (J62) |
| MPesa's operational framework (L96) | Enhanced risk-sharing (G32) |