A recently published report 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. Rapid expansion of mobile money has lifted an estimated 2% of Kenyan households (some 194,000) out of extreme poverty.
It has also enabled 185,000 women to move out of subsistence farming and into business or sales occupations.
Mobile phone penetration is rising across sub-Saharan Africa, with 76 % of the population having a mobile phone subscription. The growth in mobile phone ownership raises the potential for mobile money to reach unbanked people, providing them with a more affordable payments system.
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.
The recent findings also show that in areas that have experienced large increases in access to mobile money people were more likely to be working in business or sales rather than in subsistence farming. Additionally, fewer people in these areas reported having secondary occupations.
That mobile money has a positive impact on economic outcomes for women is particularly notable when seen against some historical studies on related subjects. For example, studies on the impact of micro-finance on female clients, and on the economic returns to capital grants for female-operated small businesses.