Is Mobile Money Changing Rural Africa? Evidence from a Field Experiment

Prof. Catia Batista,

What is the economic impact of newly introducing mobile money in rural areas underserved by financial services? This study is the first to use a randomized control trial to answer this research question. Using a sample of rural communities in Southern Mozambique, our experimental results show that the availability of mobile money translated into a clear adoption of these services, measured through administrative data on mobile money transactions. We find that introducing mobile money smoothed consumption of treated households in rural areas by making them less vulnerable to adverse weather and self-reported shocks, but we also measure reduced investment, especially in agriculture. We observe increases in the number of migrants in a household and in the migrant remittances received by rural households particularly in presence of adverse shocks, while no clear effects on savings are discernible. We interpret these results as evidence that, by drastically reducing the transaction costs associated with migrant remittances, mobile money acted as a facilitator of migration from rural to urban areas.

About the speaker

Catia Batista is Associate Professor of Economics at Universidade Nova de Lisboa, where she is also Founder and Scientific Director of the NOVAFRICA research center. She holds a Ph.D. in Economics from the Department of Economics of the University of Chicago. Catia has research interests related to international migration and remittance flows, mobile money, entrepreneurship, technology adoption, education and policy evaluation. She has done work including randomized and lab-in-the-field experiments in countries such as Cape Verde, the Gambia, Ireland, Kenya, Portugal, Mozambique and Sao Tome and Principe. Catia has taught at the University of Chicago, University of Oxford, Trinity College Dublin, and Notre Dame University. She is currently a Research Fellow at the international research centers CReAM (London, UK) and IZA (Bonn, Germany). Previously, Catia worked at the International Monetary Fund and at the Portuguese Catholic University, and consulted for the World Bank and the International Growth Center. Her academic work has been published in outlets such as the Journal of Development Economics, and the World Bank Economic Review.

Date: 14 March 2019

Time: 12:00 - 13:00