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Mobile Money and Household Consumption Patterns in Uganda

John Dunne and Elizabeth Kasekende
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Elizabeth Kasekende: Bank of Uganda

No 210, SALDRU Working Papers from Southern Africa Labour and Development Research Unit, University of Cape Town

Abstract: Financial services in low income countries are often not well developed, thus, individuals rely heavily on informal means of financial services to send, receive and save money, with a large number of the population unbanked. Mobile money, a type of financial innovation, enables individuals to transfer, deposit and save money using cell phone technology. It not only has the potential to improve access to financial services but could also have an effect on household consumer behaviour and improve individuals' livelihoods. This paper investigates the difference in consumption patterns between mobile money users and non-users in Uganda, one of the countries that have seen significant increases in mobile money usage, since its introduction in 2009. It is based on the Financial Inclusion Tracker Surveys (FITS) household level data that was conducted in 2012. Using ordinary least squares and seemingly unrelated regression estimation techniques, the results suggests that mobile money users are less likely to spend on food, a necessity, and more likely to spend on luxury goods, than non-users. In addition, mobile money users are more likely to receive more remittances and, as a result, they are able to spend more efficiently on particular commodities than non-users. This suggests that mobile money could indeed potentially improve individuals' livelihoods.

Keywords: Mobile money; Consumption patterns (search for similar items in EconPapers)
JEL-codes: D12 O33 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-afr, nep-dev, nep-fle, nep-mfd and nep-pay
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