Sarah Logan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
A recently published study on the long-run effects of mobile money on economic outcomes in Kenya provides some valuable insights that will benefit economic development and financial inclusion policies across Africa. The study found that increased access to mobile money has reduced poverty in Kenya, particularly among female-headed households. It has also enabled , women to move out of subsistence farming and into business or sales occupations.
Mobile money is a form of electronic money that allows you to conduct financial transactions using your mobile phone. The growth in mobile phone ownership raises the potential for mobile money to reach unbanked people, providing them with a more affordable payments system. The service was designed to enable remittances to be sent home, and has enjoyed widespread adoption.
The impact on poverty reduction appears to be the result of improved financial behaviour β by facilitating easier and safer savings β and changes in the occupational choice of users. Mobile wallets offer a secure place to save as funds are stored virtually.
And both the mobile money facility and the mobile phone can be password-protected. Savings can be used during hard times or for productive investments, like establishing or expanding a small business. Before mobile money the transaction costs of sending money over large distances were high. This was true both in terms of time as well as the financial resources needed to effect transactions.
