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Mobile phones, rent-to-own payments & water filters Evidence from Kenya

Jill Luoto and David Levine ()

No WR-1039, Working Papers from RAND Corporation

Abstract: Uptake of safe water products remains low, in spite of modest cost. We experimented with a sales offer that combined a free trial and rent-to-own payments for durable filters. Purchase rates doubled under this sales offer to 31% compared to a traditional lump-sum sales contract. To lower transaction costs we collected payments using Kenya's vast mobile banking network, MPESA. Mobile repayment rates were low; many filters were paid only when a vendor came in-person to request payment, which adds social pressure. While the rent-to-own offer is attractive, more work is needed to reduce transaction costs in rural and peri-urban Kenya.

Pages: 29 pages
Date: 2014-07
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