The Impact of Mobile Money on Long-Term Poverty: Evidence from Bangladesh

Islam A.T.M. Hasibul, Basher Syed Abul and Haque A.K. Enamul

MPRA Paper from University Library of Munich, Germany

Abstract: Mobile money has become a lifeline for millions of poor people who have limited access to a formal banking system. It encompasses a wide range of benefits such as women’s empowerment, risk sharing, improved labor market outcomes and reductions in poverty. In this paper, we ask whether mobile money can help lift people out of poverty. Previous studies have addressed this question by using microanalyses of field experiments or longitudinal data on rural households, whereas we use district-level data to reevaluate the mobile money–poverty nexus. In particular, we study the impact of mobile money on district-level poverty in Bangladesh over the period 2010–2016. Our study finds that every 1 billion Taka (approximately US$ 11.76 million) increase in mobile money transactions via the bKash system leads to a 0.48% reduction in the poverty rate in Bangladesh. The marginal impact ranges from 0.27 to 0.48 percentage points across five poverty quintiles, implying a reduction of poverty rates between 0.9 and 1.5 percentage points compared with the base poverty rate of 31.5% in 2010. The findings suggest that mobile money has been successful in fostering various poverty reduction initiatives and that targeted policy prescriptions can be devised to lift up poorer societies that are still outside the purview of mobile financial services. To further increase mobile money use, the government could use its own infrastructure to enhance mobile agent density in the poorest sectors of society.

Keywords: Mobile money; poverty; bKash. (search for similar items in EconPapers)
JEL-codes: G20 I32 L96 O16 (search for similar items in EconPapers)
Date: 2019-12-09
New Economics Papers: this item is included in nep-dev, nep-fdg, nep-isf, nep-mfd and nep-pay
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Related works:
Journal Article: The impact of mobile money on long-term poverty: evidence from Bangladesh (2022)
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