Friends or Foes? Mobile money interaction with formal and informal finance

Access to formal financial services is a key determinant of financial inclusion and yet, informal mechanisms still dominate the financial system in developing countries. In this context, the purpose of our article is to investigate how the growing effort to harness mobile money designed for unbanked individuals may help to overcome barriers to access formal financial services. Using a unique dataset obtained from an individual-level survey conducted in Burkina Faso, we explore the interplay between mobile money innovation and pre-existing formal and informal financial instruments. Our main findings show that, overall there are no differences in the inclination of mobile money users and non-users to make deposits in formal or informal deposit instruments. However, a closer investigation reveals suggestive evidence that it may increase the probability of participants in informal mechanisms to make deposits in formal financial instruments, especially using a bank account. Moreover, considering disadvantaged groups, we find for women, irregular income and less educated individuals that mobile money may increase their probability to make deposits in a bank and/or credit union accounts. Our results are robust to using instrumental variables and propensity score matching techniques that mitigate the endogeneity problem. They also pass a number of robustness checks as well as considering an alternative dataset. Given the low access to formal financial services in developing countries, our findings taken together indicate how the increasing adoption of mobile money may act as a stepping-stone towards financial inclusion. (JEL Classification C83, D14, G21)     

Mobile money,family assistance and welfare in Cameroon

This paper aims to investigate the effect of mobile money services on the welfare in Cameroon. It specifically verifies whether the welfare of people benefiting from family assistance is improved via the mobile money services offered by the two main operators in the country, namely: Orange and Mtn. The data used come from the « FinScope Consommateur Cameroun » Survey carried out in 2017 by the National Institute of Statistics (INS). Based on the propensity scores estimations, this study shows a positive and significant effect of mobile money on welfare. However, among the operators, Orange has a better impact compared to Mtn which does not present a significant effect. These results call on the authorities in charge of the development and implementation of financial inclusion policies to recognize the interest of digital financial services at the heart of financial inclusion strategies for the welfare of the poor.     

Competition reform and household welfare: A microsimulation analysis of the telecommunication sector in Ethiopia

This paper presents a novel simulation method for estimating the likely welfare effects of policy reforms aimed at increasing competition in strategic economic sectors such as mobile phone services. The proposed method relies on a partial equilibrium simulation approach and estimates the welfare impacts on current consumers and the potential welfare effects among new consumers brought into the market by changes in prices due to competition. This approach is applied to the information and communication technology (ICT) sector in Ethiopia, one of the three countries in the world with a monopoly in the market for mobile phone services. Based on household budget survey data for 2015/16 and departing from a baseline reform scenario that dilutes the market share of the state-owned monopoly to 45 percent, the simulation model estimates a 25.3 percent reduction in the price of mobile services and an increase in 5.7 million new users of mobile services. The predicted drop in prices and increased users would generate a combined relative welfare gain of 1.18 percent (1.09 percent among current users and 0.09 percent among new users), that could be translated into a 0.31 percentage point decline in the national poverty rate and equivalent to lifting about 275,000 people out of poverty. Alternative reform scenarios that dilute the market share of the monopoly to 75 percent and to 30 percent are expected to reduce poverty rate in 0.13 and 0.52 percentage points, respectively. The method proposed in this study represents a useful tool for promoting competition reforms in developing countries, particularly in sectors known for excluding significant segments of the population because of high consumer prices.     

Is better access to mobile networks associated with increased mobile money adoption? Evidence from the micro-data of six developing countries

In several developing countries in Sub-Saharan Africa, accessibility to digital financial services is increasing because of the development of mobile money services. People previously excluded from the financial system have started to have access to financial services such as receiving and sending remittances, saving, and borrowing. This study examines the effect of network accessibility on the use of mobile money in six developing countries (Bangladesh, Kenya, Nigeria, Pakistan, Tanzania, and Uganda) using GPS information on each household and mobile phone network coverage maps. We find that among these six countries, network accessibility is associated with the use of mobile money in a robust way only in Pakistan and Tanzania. In those two countries, when a household location becomes 10 km closer to the center of the area with multiple mobile networks, the probability of using mobile money increases by 10 percent. In the other countries, we did not find a robust relationship between the use of mobile money and network accessibility. This suggests that increasing network accessibility may not be an efficient method for increasing mobile money adoption in certain countries. The fact that mobile money use rates differ between Tanzania and Pakistan also suggests that the effect of mobile networks is unrelated to the overall level of mobile money adoption.     

Mobile banking in a developing economy: A customer-centric model for policy formulation

India needs inclusive growth to pull millions out of poverty. Despite the best efforts of mainstream financial institutions, financial exclusion is depriving millions of poor any chance to attain adequate standard of living. Telecommunication infrastructure growth especially mobile phone penetration has created an opportunity for providing financial inclusion. The current state of mobile banking is characterized by a top-down approach. This paper presents a bottom-up approach of designing mobile banking service which would be acceptable and accessible to the poor customers. The results point to clear preference of the urban poor for a joint bank–telecom led mobile banking model. Conjoint analysis of the data points to preference for attributes related to security/safety of a bank along with the coverage, accessibility and nimbleness of a telecom service provider with minimal documentation. The paper in its conclusion exhorts the regulators, telecom service providers and financial institutions to involve end-users in order to create a sustainable mobile banking service for financial inclusion.     

Determinants of mobile broadband use in developing economies: Evidence from Sub-Saharan Africa

Broadband is seen as a vector of economic growth and social development. In the developing world, mobile technologies are widely adopted and mobile broadband is progressively rolled-out with high expectations on its impact on the countries’ development. We highlight what the determinants of mobile broadband use are in four Sub-Saharan countries. Using micro-level data coming from household surveys over 5 years, from 2013 to 2017, we show that SIM card ownership and being part of an online social community has a strong positive impact on mobile broadband use. We also highlight a positive correlation between digital inclusion and financial inclusion as mobile money users and bank account users are found to be more inclined to use mobile broadband. However, beyond apparent similarities, mobile broadband is used in different ways according to countries specificities. For instance, among the non-mobile owners in Nigeria, the unemployed are the most likely to use mobile broadband, most probably for job search practices, while it is rather used by students for information gathering in other countries. Finally we show that those excluded from mobile broadband use are the eldest, those with the lowest level of education, and women.     

Mobile payment and rural household consumption: Evidence from China

Exploring effective measures to promote rural household consumption is a challenge for developing countries, where rural areas often face severe financial exclusion and undeveloped commercial services. In this research, the influence of mobile payment, a popular payment method emerging in recent years, on rural household consumption is assessed by adopting China Household Finance Survey of 2017. Estimation results under the instrumental variable method suggest that mobile payment has a statistically significant and facilitating effect on rural household consumption in China. This positive effect is attributed to the benefits of mobile payment in improving financial inclusion and the convenience of consumption activities for rural areas, which is verified by performing several disaggregated analyses in our study. This work provides new evidence for the increasing literature on the economic impact of financial technology and several enlightenments for developing countries to improve the quality of public life through information intervention policies.     

普惠金融的反贫困效应研究——基于西部地区的面板数据分析

本文基于2005~2015 年西部12 省市（区）数据,测度普惠金融发展水平、贫困程度,运用面板数据实证检验普惠金融的反贫困效应,研究表明：（1）西部地区普惠金融发展水平整体较低,发展速度缓慢,省际差异明显;（2）西部地区的扶贫开发取得了明显效果,贫困程度较轻;（3）从普惠金融的各个维度看：金融服务覆盖率、金融服务可得性以及金融资源的实际使用效率对贫困均有明显的减缓作用;（4）普惠金融对西部地区反贫困效应整体显著,但分省效果并不明显。最后,就发展普惠金融以减缓西部地区的贫困现状提出相关的政策建议。     

Methods, results and policy implications of poverty and food security mapping assessments

The importance of poverty reduction to the world development agenda has motivated greater interest in the geographic dimensions of poverty and food security. This special issue of Food Policy includes examples of poverty and food security mapping used to support policy development in agricultural and rural areas. The volume includes eight country case studies and one cross-country comparison that illustrate advances in our capacity to assess welfare over large areas and at detailed spatial resolutions. Poverty mapping facilitates assessments of the role of environmental factors on the broad spatial pattern of poverty and food security. Evaluating proximity and accessibility in welfare outcomes can improve our knowledge of poverty patterns and processes. Spatial statistics can enhance our understanding of geographic and neighbourhood effects on poverty and food security outcomes. The development of effective policies requires increased collaboration among stakeholders, researchers and policy makers in constructing and using poverty and food security maps.     

Implementing Technologies for Financial Service Innovations in Base of the Pyramid Markets

This study examines how information communications technologies (ICTs) can be implemented effectively to provide financial service innovations to the poor who live in developing countries, a market collectively known as the “Base of the Pyramid” or BOP. The BOP needs—but commonly lacks—basic financial services, a situation that perpetuates poverty. With a dearth of formal banks especially in rural areas of developing countries, the BOP has almost no access to savings accounts, credit lines, and other necessary services. However, ICTs have the potential to overcome cost, infrastructure, and other barriers to service delivery, and are being used to offer new financial services such as mobile phone banking to the BOP. The purpose of this study is to determine ways of successfully implementing these technology‐enabled service innovations. The study draws on the Socio‐Technical View for theoretical girding, and uses case method to examine multiple ICT implementation projects in five sub‐Saharan African countries (Ghana, Kenya, Malawi, Mozambique, and Uganda). The projects, which were carried out by a leading microfinance banking organization named Opportunity International, provided mobile banks, point‐of‐service, and mobile phone banking services to the BOP. Several techniques were applied to gather data in the field over a two‐year period: depth interviews, direct observations, and internal document and data analysis. Multiple forms of evidence were triangulated against one another, and analyzed across cases until themes emerged and converged. In doing so, two specific forms of analysis, explanation building and cross‐case synthesis, were employed to make sense of the data. The findings, summarized as research propositions, collectively conclude that implementation is effective when the unique socio‐human, governmental‐regulatory, and market conditions of the BOP are accounted for, such that fit is achieved between the technologies and environments they are situated in. More specifically, effectiveness comes when implementation (1) addresses customer and agent limits with the technologies, and is accepted and supported by trained staff who monitor technology use and make responsive system adjustments; (2) exploits and promotes supportive governmental regulations and actions, as well as leverages sound electronic fund transfer (EFT) switches, whether government or bank established; and (3) accounts for low business capabilities and evolving market competition, along with the underdeveloped financial sector and financial literacy of the population. In sum, there are multiple factors that should be considered in the design and installation activities surrounding these technologies to ensure they provide cost‐effective, quality financial services to the poor.     

Status of development,regulation and adoption of GM agriculture in Africa: Views and positions of stakeholder groups

The use of genetically modified (GM) crop technology in tackling food security problems and poverty reduction in Africa continues to generate debates over its benefits and safety. Only four countries, South Africa, Sudan, Burkina Faso and Egypt have commercialized GM crops in Africa but controversy surrounds current cultivation of GM maize in Egypt. Our study provides new perspectives on the status, development and regulation of GM crops through examining the views of 305 stakeholders in six African countries across four regions: South Africa, Kenya (East Africa), Egypt and Tunisia (North Africa), Ghana and Nigeria (West Africa), supplemented by interviews with relevant international organizations. The study revealed the challenges leading to the development of biosafety regulatory frameworks and the role of individual stakeholders in the facilitation of GM crops across African countries. This study also revealed that some countries may go through a Fiber–Feed–Food (F3) approach to adopt GM crops where Bt cotton will be adopted first followed by GM crops for livestock feed while undergoing all the necessary assessments before producing GM foods for human consumption. An overwhelming majority of stakeholders placed emphasis on risk analysis (risk assessment and management) in view of limited capacity, lack of scientific expertise and public concern, and encouraged a centralized approach to risk assessment similar to the European Union model of the European Food Safety Authority (EFSA).     

Analysis of the socio-economic determinants of mobile money adoption and use in Cameroon

This study analyses the adoption and use of mobile money (MM) services based on data collected on 1000 households from the Global Findex Survey conducted in 2017 in Cameroon, by the World Bank. More specifically, this study attempts to first profile MM adopters, and then identify the explanatory factors of the different uses of these services. A Probit model is used to highlight the explanatory factors of MM adoption combined with multivariate regressions to identify the determinants of MM service use. Then, estimates of three independent Probits, under the assumption of non-simultaneity of the different uses of MM services are done to test the reliability and robustness of the results. The results reveal that socio-economic factors such as age, level of education, the standard of living and mobile phone ownership differentially affect both the adoption and use of MM services in Cameroon.     

重塑中国特色医疗卫生事业中政府的职能——源于医疗卫生筹资结构的思考

中国医疗卫生事业改革和发展与每一位国民息息相关,政府的积极介入是每一位国民获得医疗卫生服务基本权利的根本保证。文章以中国市场化改革以来医疗卫生筹资结构演变的轨迹为研究对象,文中相关数据反映了政府履行医疗卫生责任强弱演变过程。事实上,政府干预医疗卫生领域的程度、财政负担的多少和社会福利的高低之间是存在一个合意区间的,能否在提高全社会满意度和福利的同时,使政府的干预和财力的支出逐步趋向合理,从而政府职能更多地转向培育和促进医疗卫生市场的发展,是本文的研究重点。     

Poverty effects of food price escalation: The importance of substitution effects in Mexican households

Recent food price increases reportedly caused significant numbers of households to fall into poverty, particularly in the developing world. Most research into the welfare effects of these food price changes assumes constant demand or approximates second order substitution effects. Poverty forecasts with these assumptions may overestimate or underestimate the effect of food price increases in a nation where most households consume diverse food baskets. We account for full substitution by calculating a theoretically consistent food demand system, accounting for household responses to food price changes by decreasing some food purchases and increasing other food purchases. We use Mexican data to confirm the mitigation of adverse welfare effects from food price increases after accounting for country-specific dietary preferences in modeling demand. In comparison to previous literature, our welfare measures predict theoretically consistent numbers of Mexican households entering poverty due to recent food price changes.     

The impacts of hybrid maize seed on the welfare of farming households in Kenya

This paper explores the impacts of hybrid maize adoption on the welfare of farming households in Kenya. We use a four-year panel dataset to estimate the effects of hybrid seed use on four indicators of household welfare, namely, income, assets, inequality and poverty. Results show that use of hybrid seed not only contributes to higher annual income, but also to raising the value of assets, possibly reflecting longer-term welfare effects. Further, we find that use of hybrid seed reduces the depth of poverty, and that the amount planted reduces inequality. As expected, impacts differ between major and minor maize-growing areas of the country. Maize farmers who do not use hybrid seed are clearly disadvantaged. This calls for continued public and private investments in the infrastructure and policy process that supports a competitive, liberalized seed industry and improved access of smallholder farmers to well-adapted, affordable hybrids.     

The impact of regulating mobile termination rates and MNO-MVNO relationships on retail prices

A mobile virtual network operator (MVNO) provides mobile telecommunication services by eluding the constraints of the radio communication infrastructure and establishing an agreement with a hosting network operator (HNO) for the use of its spectrum. Thus, MVNOs offer a wide range of mobile services and directly compete with every mobile network operator (MNO). This paper studies the economic justifications for potential regulatory intervention that defines the level of mobile termination rates (MTRs) and negotiations and agreements among MVNOs and HNOs. The results show that symmetric MTR reduction leads to competition growth among operators, forcing every operator to reduce retail prices and, consequently, to enhancing consumer welfare. The paper also finds that a collaborative strategy adopted by an HNO and an MVNO is advantageous for both and induces a reduction in retail prices, thus weakening other MNOs.     

You are what (and where) you eat: Capturing food away from home in welfare measures

Consumption of food away from home is rapidly growing across the developing world, and will continue to do so as GDP per person grows and food systems evolve. Surprisingly, the majority of household surveys have not kept up with its pace and still collect limited information on it. The implications for poverty and inequality measurement are far from clear, and the direction of the impact cannot be established a priori. This paper exploits rich data on food away from home collected as part of the National Household Survey in Peru, to shed light on the extent to which welfare measures differ depending on whether food away from home is accounted for or not. Peru is a relevant context, with the average Peruvian household spending over a quarter of their food budget on food away from home since 2010. The analysis indicates that failure to account for this consumption has important implications for poverty and inequality measures as well as the understanding of who the poor are. First, accounting for food away from home results in extreme poverty rates that are 18 percent higher and moderate poverty rates that are 16 percent lower. These results are also consistent, in fact more pronounced, with poverty gap and severity measures. Second, consumption inequality measured by the Gini coefficient decreases by 1.3 points when food away from home is included – a significant reduction. Finally, the inclusion of food away from home results in a reclassification of households across poor/non-poor status – 20 percent of the poor are different, resulting in small but significant differences in the profile of the poor in dimensions such as demographics, education, and labor market characteristics. Taken together, the results indicate that a serious rethinking of how to deal with the consumption of food away from home in measuring well-being is urgently needed to properly estimate and understand poverty around the world.     

Supermarket contracts and smallholder farmers: Implications for income and multidimensional poverty

Food systems in developing countries are changing rapidly with a growing role of modern supermarkets. Supermarkets influence supply chains and the way agricultural products are sourced from farmers. Especially for the procurement of fresh fruits and vegetables, supermarkets often contract farmers directly to ensure consistent and high-quality supply. One important question, which is addressed here, is whether smallholder farmers benefit from supermarket contracts. Previous studies address this question, but mostly focus on income effects without exploring implications for other dimensions of household welfare, such as nutrition, health, or housing conditions. Moreover, most existing studies rely on cross-section data. We add to the literature by analyzing effects of supermarket contracts on income and multidimensional poverty using three rounds of panel data collected from smallholder vegetable farmers in Kenya and econometric models with household fixed effects. On average, supermarket contracts increase household income by over 40%. We also find significant reductions in income poverty and multidimensional poverty. Quantile regressions show that farmers in all income groups benefit, but richer households benefit more than poorer ones in absolute terms. However, supermarket contracts cause the strongest reductions in multidimensional deprivations among the poorest households.