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.     

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)     

Meat marketing in Burkina Faso after the devaluation of the FCFA: Insights into the functioning of informal market systems

The strategies that participants in informal African markets adopt in response to shocks have rarely been analysed, yet these can provide important insights into how such markets function. Policy advice often seeks to modernise trading practices within such markets so as to improve efficiency. However, efforts to improve efficiency could have undesirable consequences if the current functioning of the markets is inadequately understood. In Burkina Faso, the FCFA devaluation in 1994 led to increasing livestock exports and a subsequent meat shortage on the domestic market. Based on market statistics from Burkina Faso and household interviews, the study investigates the status of meat consumption before and up to four years after the devaluation. Results indicate that the price increase for cattle was only transmitted to consumers after a time lag. Meat is more frequently sold in little heaps than on a weight basis. Lower per-kg prices of smaller size heaps imply an income gain for poorer consumers. Butchers use all edible body parts in addition to the carcass (i.e. head, hoofs, intestines) to buffer price fluctuations and to cope with the consumers’ notion of a fixed nominal price. This suggests that butchers and their clients are embedded in networks of what [S. Plattner, 1989. Economic behavior in markets. In: Plattner S. (Ed.), Economic anthropology, Stanford, pp. 209–222.] called equilibrating economic relations, which are favoured by the perishable nature of meat. Selling live animals or meat by weight is often considered as a measure to increase transparency within informal markets. However, the introduction of formalized or standardized marketing measures alone, without lowering the transaction costs of other components of the value chain, risks undermining the equilibrating social relationships that play an important role particularly for the poorer market actors, and thereby disadvantaging vulnerable population groups.     

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.     

Local impacts of a global crisis: Food price transmission,consumer welfare and poverty in Ghana

This paper takes a local perspective on global food price shocks by analyzing food price transmission between regional markets in Ghana. It also assesses the impacts of food price increases on various household groups. Taking the 2007–2008 global food crisis as an example, we show that prices for domestic grain products are highly correlated with world market prices. This is true both for products for which Ghana is highly import-dependent (e.g., rice) and the products for which Ghana is self-sufficient (e.g., maize). The econometric results also show that price transmission is high between regional producer markets and markets located in the country’s largest cities, and the distance between producer and consumer markets and the size of consumer markets matter in explaining the price transmission. The welfare analysis for households as consumers shows that the effect of world food prices appears relatively modest for the country as a whole due to relatively diverse consumption patterns within country. However, the national average hides important regional differences, both between regions and within different income groups. We find that the poorest of the poor—particularly those living in the urban areas—are hardest hit by high food prices. The negative effect of the food crisis is particularly strong in northern Ghana. The main explanations for this regional variation in the price effect is the different consumption patterns and much lower per capita income levels in the North of Ghana compared to other regions in the country.     

Serving the poor: Multisided mobile service platforms,openness, competition,collaboration and the struggle for leadership

Four billion people at the base of the economic pyramid live on incomes below $3000 a year in local purchasing power, and more often than not, lack consistent access to services, such as water, healthcare, banking or agricultural know-how. Rapid advances in mobile technology offer the potential to mediate access to essential services. Through this research, the answers to the following question were explored: will mobile service platforms bridge the gap between service providers and people living at the base of the pyramid in developing countries? Anchored in interviews with 31 experts in the field of mobile and ICT, qualitative analysis starting from platform leadership to explain the role of mobile service platforms is presented: how operator, device and service provider centric platforms compete, collaborate and open up (or not) for delivering scalable services to the poor. Based on the analysis in this paper, it is portended that although operator centric platforms are in pole position, device centric platform providers, being astute innovators, are positioned to close the lead by presenting alternatives to bridge the gap in developing countries. This paper frames the current debate on M4D through the lens of platform theory, and aims to provide guidance to policy makers to improve access to services for the poor.     

The impact of agricultural research on productivity and poverty in sub-Saharan Africa

While it is widely recognized that agricultural research is a key driver of broad-based technological change in agriculture that benefits the poor in many different ways, little is known about its aggregate impacts on productivity growth and poverty reduction in sub-Saharan Africa (SSA). Using a polynomial distributed lag structure for agricultural research within a simultaneous system of equations framework, this paper first demonstrates that agricultural research contributes significantly to productivity growth in SSA. Productivity growth is again shown to raise per capita incomes, with income increases finally having significant poverty-reducing effects. With an aggregate rate of return of 55%, the payoffs to agricultural research are also impressive. Agricultural research currently reduces the number of poor by 2.3 million or 0.8% annually. While the actual impacts are not large enough to more than offset the poverty-increasing effects of population growth and environmental degradation, the potential impacts of agricultural research are far greater. Apart from low research investments, SSA faces several constraints outside the research system that hinder realization of potential research benefits. The results show that doubling research investments in SSA would reduce poverty by 9% annually. However, this would not be realized without more efficient extension, credit, and input supply systems.     

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.     

Managing and modeling the price reduction effect in mobile telecommunications traffic

As needs for telecommunications services diversify, an increasingly wide range of services is becoming available in the market. Service price reduction is one strategy used by service providers to retain existing subscribers. A price reduction for one service, however, can affect the individual-level usage for other services. Price reductions can also be imposed on a service provider by regulation. For these reasons, understanding how price reductions affect service usage is of growing importance to the telecommunications industry for purposes of pricing and tariff development. In this paper, an individual-level usage model for telecommunications services is developed and the effects on usage of a price reduction are analyzed. The model is applied to age-stratified aggregate traffic data for a Korean mobile telecommunication service provider. Finally, a 0-1 integer programming model is proposed for choosing which market segment should be targeted with a price reduction to minimize revenue loss. These models can be applied to market segmentation and price reduction strategy.     

A quantitative analysis of poverty and livelihood profiles: The case of rural Rwanda

The paper applies a quantitative methodology to study poverty and livelihood profiles on the basis of a large set of variables. It takes the context of post-conflict rural Rwanda for a case study. By means of exploratory tools (i.e. principal component and cluster analysis), it combines variables that capture natural, physical, human, financial and social resources together with environmental factors to identify household groups with varying livelihoods. The paper further explores how these clusters differ with regards the incidence of poverty, livelihood strategies and their respective crop preferences. The paper concludes that Rwandan rural policies should adopt distinct and appropriate interventions for impoverished peasant groups, each having their own particular livelihood profiles.