Mobile Money and Inter-Household Financial Flows: Evidence from Madagascar

Sabrine Bair and Ahmed Tritah

Revue économique, 2019, vol. 70, issue 5, 847-871

Abstract: Mobile money is expanding rapidly across the African continent with the potential to raise financial inclusiveness.?In this paper we investigate the impact of the introduction of mobile money in 2010 on the amount and frequency of funds sent and received among Malagasy households.?We use a selection model combined with an instrumental variable approach to deal with the selective participation into the transfer market and the endogeneity of mobile money adoption.?We show that access to mobile money has triggered more financial transactions between households at both the extensive (number of potential users) and intensive margin (level of funds).?Our results suggest that transactions costs are important and act as barriers to entry for the poor.?The advent of new communication technologies has the potential to alleviate these barriers and bring into secure financial transactions a large segment of a previously excluded population. JEL Codes: D14, G21, O16.

Keywords: mobile money; remittances; transaction costs; Africa; financial inclusiveness; Madagascar (search for similar items in EconPapers)
JEL-codes: D14 G21 O16 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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