Mobile Money, Perception about Cash, and Financial Inclusion: Learning from Uganda’s Micro-Level Data

Felix Simione and Tara Muehlschlegel

No 2023/238, IMF Working Papers from International Monetary Fund

Abstract: Will mobile money render cash less dominant over time in Africa? Can it promote financial inclusion? We shed light on these questions by exploring individual-level and nationally representative survey data for Uganda, a country in a region that pioneered mobile money in the world. We use the Propensity Score Matching method to robustly compare mobile money users and non-users across a range of indicators that capture individuals’ perceptions about cash, and the extent to which they remit, save, and borrow money. We present the first evidence that mobile money users, compared to non-users, are more likely to perceive cash as risky and less likely to prefer carrying large amounts of cash. We also confirm that mobile money users are more likely to receive and send remittances, save, and borrow. They also save and borrow larger amounts.

Keywords: Developing Country; Innovation; Digital Divide; money usage; selected indicator; Propensity Score Matching method; usage treatment; deposit balance; Mobile banking; Remittances; Financial inclusion; Digital financial services; Consumer credit; Africa; Sub-Saharan Africa (search for similar items in EconPapers)
Pages: 32
Date: 2023-11-17
New Economics Papers: this item is included in nep-afr, nep-ban, nep-dev, nep-fle, nep-mon and nep-pay
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